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3 Forms of Business Organizations

In: Business and Management

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What are the three forms of a business organization?
What are the advantages and disadvantages of each form?
For a corporation, what is the overall goal of the financial manager?
Do you agree with this goal?
Why or why not?

In this discussion I will attempt to discuss what the three forms of business organizations are and discuss what the advantages and disadvantages are for each form. I will then explain what the overall goal of a financial manager is when it comes to a Corporation and if I agree with these goals. Depending on the types of classes that have been taken or if you are a business owner yourself, some of these questions should be somewhat common knowledge. Reading from the text book, there are three legal categories when it comes to a form of business. The three legal categories are partnership, corporations and proprietorships. Most businesses that are started our sole proprietorships. They are owned and operated by one person. Partnerships are owned and operated by two or more people and corporations are legal entities that exist independent of owners (Brooks, 2010). Proprietorships have many advantages. One is that it is easy and inexpensive to form and dissolve. For less than $100 you can get yourself a business license and be a new business owner and if you decide the next day you want to shut the business down, it is well within your power to do so. All of the profits also go to the owner and have direct control of the business. When it comes to government regulations, proprietorship has more freedom to these regulations than corporations with no special taxation. With the advantages with sole proprietorship come disadvantages. First and foremost, it is hard to raise capital because banks are very wary to loan money to sole proprietorships. There is also unlimited liability and potential loss. Many small…...

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