...Forms of Business Organization Forms of Business Organization Have you ever imagined who commences the required capital, takes the accountability of arranging assets and other resources, operates them into practice, and controls and coordinates the operation to earn desired profits? If you search around, you will find a manufacturing business owned and operated by a single individual, who executes all these operations. It is significant for business owner(s) and manager(s) to comprehend the legal environment, in which their business(s) operate, not merely with regard to their own businesses however also as regards to other companies with whom they are doing business. In this context, there are six forms of business organizations, which are discussed below: a. Sole Proprietorship • Control Sole proprietorship is also termed as a sole trader. It is a form of business, which is owned and controlled by single individual and is the simplest form of business organization. The single owner of business has entire ownership and control over the assets and capital invested in the business and he or she is individually responsible (subject to some restrictions) for the expenses and liabilities of the business. • Liability A different advantage, nonetheless, is that the proprietor of this business form is responsible for all the business liabilities. Therefore, if a sole owner business undergo into financial crisis, creditors can originate lawsuits against the sole proprietor...
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...ACC 561 Jared Jones Forms of Business Organization Introduction There are four ways that a business can organize itself. The owners and partners in this newly formed business may share in a variety of responsibilities and must decide which form their business should take on. The four basic ways a business can be organized is a sole proprietorship, partnership, C corporation and S corporation. There are a variety of advantages and disadvantages to each. When it comes to Tax implications, Legal implications and Accounting implications this is especially true. Below is an analysis of the various forms of business and the advantages and disadvantages to each, along with various implications associated with taxes, legality, and accounting. Sole Proprietorship Sole Proprietorship is a type of business run by a lone individual. This individual owns the business, and deals solely with all of the losses and all of the profits. The owner also is responsible for all of the liability and has complete control of business operations (Carr, 2011). Typically the business will have an income statement and a balance sheet. The owner through personal income tax return pays all taxes for the business. There are several advantages to this form of business: It is generally not difficult to organize due the requirements of registration not being as harsh to abide to and the financial capital is relatively small. Also, the sole owner has the ability to make all decision for the company...
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...Liability Partnership, Corporation Paper Angelika Evanoff FIN/419 July 20, 2015 Mrs. Michele Huss Limited Liability Corporation, Limited Liability Partnership, Corporation Paper The purpose of this paper is to discuss three legal forms of business organization; a limited liability corporation or company, a limited liability partnership, and a class C corporation. The paper begins with a brief description of each structure, followed by a comparison and contrast of each form’s advantages and disadvantages. The author finishes by citing examples in which she would use each type of business structure if establishing a new business. It is important to choose the appropriate legal form of organization because the decision affects owner’s risks, raising money, and how profits are taxed (Gitman & Zutter, 2014). Readers can expect to have a better idea of the various options available to entrepreneurs after reading this essay. Legal Forms of Business Organization The three most popular structures of company organization are the sole proprietorship, the partnership, and the corporation. A sole proprietorship has one owner while a partnership has two or more owners, and a corporation is an entity created by law (Gitman & Zutter, 2014). The forms offer limited liability or unlimited liability to its owners. Various structures that provide limited liability include a limited liability corporation, limited liability partnership, and a class C corporation. A limited liability...
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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...
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...Subject: Research on the right form of business entity Mr. XYZ, Conducting thorough research on the plausibility of choosing a specific form of legal business entity form for a certain specific business, several facts have been learned. I have been able to understand why it is always very much needed to know and verify the right form of legal structure to be applied to a business before actually setting up the business and carry on with its operation. As the business of my desire must have to be established in the state of Florida, the primary research has been thoroughly based on the legal requirements of setting up any form of business in the concerned state. The desired form of business is a bookstore. The basic task before setting up any business calls for determining the legal structure that will suit the business in an appropriate manner. Several options, in this regard, have been explored by me. This exploration has made it possible for me to ultimately choose the right kind of legal structure befitting the bookstore business. I have explored the different forms like sole proprietorship and partnership, and not the forms like a limited liability (LLC) and a corporation. I have not thought it right to go deep into the structural details of such legal forms of business because I have never thought of investing that much in my business. In the course of my research I did look for gaining more knowledge about sole proprietorship form of business. I have learned that sole...
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...Business Organization Form Choice Memorandum Erin P PLAW 350 December 9, 2013 Memorandum To: Professor From: Erin P. Date: October 23, 2013 Re: Business entity form and federal tax regime choice of Erin P Photography ------------------------------------------------- As per our conversation on November 29, 2013, in regards to the firm’s new client, Erin P Photography, I have compiled the following information of your review. In this memorandum you will find that I have thoroughly examined the most viable options of business entity formation for Erin P Photography to show that forming a limited liability company would be the most appropriate choice for our client. I then examined the available options of federal tax regime selection for limited liability companies to find that federal taxation as an S corporation is the most appropriate and beneficial choice for the firm’s new client, Erin P Photography. The client, Erin P, came to the firm last week seeing guidance in legally establishing her own photography business. Ms.P requested that our firm handle the initial legal set up, but did not know what businesses entity form would be the best choice for her new enterprise. Ms. P was also unsure as to how the new business should be taxed under federal guidelines to best suit her interests. Ms. P did provide information as to her new business, Erin P Photography. Ms. P would be the sole employee, and preferably sole owner, of the business at inception and wishes...
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...Chantelé Shaw LIT1: Task 310.2.1-01-06 Forms of Business Organizations and Key Characteristics and Differences Student # 000258452 6/12/12 Part A The Report Sole Proprietorship A sole proprietorship is a privately owned business, that is owned by one person who has unlimited and unshared liability. The proprietorship, since managed by one person, has no need for any type of agreements or formalities. The self-governing aspect of the sole proprietorship, allows for the owner to make decisions on their own without criticisms and the complexities of added decision makers such as other managers or board members. A major benefit that is 3 fold is the impact of the financials of the company and the pockets of the owner. The proprietor is able to enjoy all of the profits from the company. Costs of doing business or expenses lead to tax breaks and the ability to, in essence, charge off expenditures. The advantage of pass through taxation is important to the “laid back” nature of managing a sole proprietorship. A simple profit and loss statement can be submitted along with the owner’s annual tax return and it is considered sufficient to the Federal Government. These proprietorships are very easy to start and just as simple to terminate. Once the owner has satisfied all contracts, it can be decided to take on no more work and terminate the business. Although the benefits are nice the disadvantages are just as cruel when it comes to the business. The downside to the autonomous...
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...The four main forms of business organizations namely sole proprietorship, partnership, C corporation, and S corporation have various advantages and disadvantages in terms of tax implications, legal status, financial obligations, and even set up time and compliance issues. A sole proprietorship is an individual based business. The advantages of sole proprietorship are various including the easiness to start and dissolve the company, the ability to have personal and complete control over the company, and the ability to retain all profits and include them in personal tax returns. Sole proprietorship has some disadvantages that include the owner’s unlimited liability over the company. The owner is legally responsible for all the debts of the company. Another disadvantage is that it is hard to raise funds because it depends on one person who might not have sufficient funds. It may also be difficult to attract high skills and professional employees because some would want to either have a high ranking position in the company or the chance to buy stock. Sole proprietors are also taxed more than corporation for example corporations pay 15% tax for income up to $ 50,000 while sole proprietors pay 15% (if filing married filing jointly) for income up to 35, 800 only. Financial statements for sole proprietorship are the income statement, the balance sheet, the statement of cash flows, and the statement of owner’s equity. In a partnership there are two or more owners. Partnership is also...
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...of Business Administration Graduate Program Project Management Helps IT Group Grow More User-Friendly Study Case # 1 By: Karla M. Ramos Y00047695 BADM 5100 Profa. Olga Maldonado Our case study introduces an emergent problem faced by Capital Region Health Care (CRCH) in regards to its Information Technology Services (ITS) group. The article presents the current work mechanism used by the ITS unit on their beeper system, thus unveiling the lack of organization within the unit. The problem seemed to arise from the fact that the ITS group was fundamentally a technology-driven shop, the lack of communication between the group and its users and the absence of knowledge about the human. After many incidents had taken place the CIO, Deane Morrison, took noticed and decided it was time to change the culture of the ITS group and branch into a more customer service oriented system. In order for us to tackle this organization scarcity of customer service, we must understand what is organizational behavior. Robbins and Judge (2011, p.43) describe it as a field of study that investigates the impact that individuals, groups, and structures have on behavior within organizations, for the purpose of applying such knowledge toward improving and organization’s effectiveness. Another important concept we must understand is that of organizational culture, Robbins and Judge (2011, p.555) describe it as a system of shared meaning held by members that distinguishes the organization from...
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...Jameson's Company chapter 20 in Bagley & Savage subject: Corporate Governance, Ownership, and Control: Forms of business organizations (e.g. sole proprietorship/limited partnership/llc/etc....) Ernie Jameson is a design engineer with a proven track record in the field of electronic instruments. He recently designed new VLSI very large scale integrated chip. This chip is meant to be the heart and soul of a digital sampling keyboard to b called Echo. Jameson believes the Echo will set a new industry standard. He wishes to organize a business enterprise to build and market it. He has a meeting with his lawyer and conveys to her the following bits of information: a. It will take approximately two years to turn the VLSI chip into a marketable product. b. Jameson has more than $200,000 in savings from previous ventures. He does not want any of that monyey at risk in his new venture. However, he wants a part of the ownership; he is unsure what percentage he wants. c. Currently, five private investors are willing to put money into this venture. Only two of the five want to play an active role in the enterprise. Jameson is willing to give these two some limited control. d. Jameson knows that he is not qualified to manage the new endeavor. Nonetheless, he wants a significant say in how it proceeds. e. Five more investors could be attracted to this product, but only if they could be guaranteed some fixed return on their money...
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...to make in starting a business is choosing a form of ownership. This section will lead you through your options and present the advantages and disadvantages of each (Hatten, 2006). When entrepreneurs establish a business, they must decide on the form of business ownership. There are different types of business ownership, and the type that is chosen can affect the profitability, risk, and value of the firm (Madura, 2004). Sole proprietorship, as the simple and easy to form type of business, is a business that is owned by one person. The vast majority of small business starts out as sole proprietorships. Sole proprietors own all the assets of the business and the profits generated by it. Most small business owners prefer the proprietorship because it is simple to enter, operate, and terminate and provides for relative freedom of action and control (Megginson, et al., 2000). On the other hand, partnership is defined as a voluntary association of two or more persons to carry on as co-owners of a business for profit. Like proprietorships, the law does not distinguish the business and its owners. The partner should have a legal agreement that sets forth how decisions will be made, how profits will be shared, how disputes will be resolved, how future partners will be admitted to the partnership, how partners can be bought out, and what steps will be taken to dissolve the partnership when needed. Yes, it is hard to think about a “breakup” when the business is just getting started...
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...Legal Forms of Business Consider each of the following forms of business: sole proprietorship, partnership, limited liability partnership, limited liability company, S corporation, franchise, and corporate form. Develop scenarios in which each of these forms of business would be the preferred form. For each scenario, justify why the corresponding business form is preferred. In today business world entrepreneurs are presented with many forms of business organization to choose from to conduct their business. Every form of business brings advantage as well as disadvantage and the selection of the legal form of the business organization available should base on according to Cheeseman (2010), “factors, including the ease and cost of the formation, the capital requirements of the business, the flexibility of management decisions, government restrictions, personal liability, tax consideration, and the like.” (Cheeseman, 2010). Sole proprietorship, partnership, limited liability partnership, limited liability company, S corporation, franchise, and corporate are the most known entrepreneurial forms of conducting nosiness. Below are you will find scenarios in which each of these forms of business would be the preferred form and justification why the corresponding business form is preferred. Sole Proprietorship Sole proprietorship represents the simplest form of the legal business organization where the owner, called in this form of business organization the sole proprietor, is...
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...Partnership Form of Organization Partnership Form of Organization A partnership is an association of two or more persons to carry on as co-owners of a business for profit. Partnerships are sometimes used in small retail, service, or manufacturing companies. Also accountants, lawyers, and doctors find it desirable to form partnerships with other professionals in the field. Characteristics of Partnerships STUDY OBJECTIVE 1 Identify the characteristics of the partnership form of business organization. Partnerships are fairly easy to form. People form partnerships simply by a verbal agreement, or more formally, by written agreement. We explain the principal characteristics of partnerships in the following sections. Association of Individuals A partnership is a legal entity. A partnership can own property (land, buildings, equipment), and can sue or be sued. A partnership also is an accounting entity. Thus, the personal assets, liabilities, and transactions of the partners are excluded from the accounting records of the partnership, just as they are in a proprietorship. The net income of a partnership is not taxed as a separate entity. But, a partnership must file an information tax return showing partnership net income and each partner's share of that net income. Each partner's share is taxable at personal tax rates, regardless of the amount of net income each withdraws from the business during the year. Mutual Agency http://edugen.wiley.com/edugen/courses/crs1663/...
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...Small Business Idea Paper The government recently released funds to individuals who want to create a small business. This concept of releasing funds to individuals will create more jobs and stimulate the economy. The first step for a small business owner is to determine which of the four forms of business the organization will best fit with the new owner’s ideas. In addition, the business owner will need to review all tax legalities and implications associated with the different forms of business for her organization. This paper will discuss the four forms of business and the different types of financial statements associated with the forms of business in relation to consequences of taxes, liabilities, and accounting implications. Sole Proprietorship Sole proprietorship is the most common and easiest form of business to create. Some of the benefits of a sole proprietorship are that the owner can make decisions of hiring and firing employees, decisions of which vendors to use, what materials and equipment to purchase and what direction they want the business to take. A disadvantage is that the owner is limited to funds as a sole proprietor can only access the funds that are available. In addition, the sole proprietor is responsible for all liabilities associated with the business. The financial statement associated with at sole proprietorship is the statement of cash flow. The statements of cash flows provide financial information regarding cash receipts and payments...
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...Part A- Essay: 7 A.01 Changed perception in marketing plan: 7 A.02 Barriers to marketing plan: 7 Marketing function isolation: 8 Organizational barriers: 8 Demographic factors: 8 Economic factors: 8 Technological factors: 8 Culture: 8 A.03 Techniques for overcoming barriers to marketing plan: 8 Be strategic: 8 Be realistic: 8 Stay focused: 9 Monitor the budgets: 9 Market research: 9 A.04 Importance of marketing plan in the strategic plan: 9 Product: 9 Price: 9 Promotion: 9 Place: 9 A.05 Ethical issues in marketing plan: 10 A.06 Organization responses to ethical issues: 10 Individualistic approach: 10 Communal approach: 10 A.07 Example of consumer’s ethics and the effect on the marketing plan: 11 Part B: Preparing marketing plan 11 B.01 Organizational capability evaluation: 11 Business experience: 11 Business reputation: 11 Company culture: 11 Business environment: 11 B.02 Techniques used in organizational auditing and analyzing external factors: 11 B.03Carried out organizational audit and external factors analysis that affect marketing plan: 12 SWOT analysis of the Toyota Company: 12 PEST analysis for Toyota Company: 13 B.04Marketing plan: 14 Marketing objective: 14 Objectives: 14 Strategy statement market share: 14 Brand awareness: 14 Current and prospective target market: 15 SWOT analysis: 15 Mission Statement: 15 Financial objectives: 15 B.05 Stages and techniques for new products development:...
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