Assignment : Types Of Business Organization

| A general partnership allows for a pooling of capital and talent and a sharing of the risk. Additional benefits to a general partnership include additional expertise in decision making and a sharing of the workload. General partnerships are easy and inexpensive to start up.

The organizational forms a company might have as it evolves from a start-up to a major corporation are: sole proprietorships, partnerships and corporations. The advantages of a sole proprietorship are that is is easily and inexpensively formed; is subject to few government regulations and it’s income is not

In a general partnership there is also the issue of control. Whereas in a sole proprietorship the sole owner has full control in the business, in a general partnership the control is split equally between the partners. This can lead to issues when the partners do not agree on the direction they want to take the company in regards to growth or other

Liability All liabilities are the responsibility of each partner. In the event of litigation, any creditors can go after the personal assets of each partner to recover any debt owed. But since liability is spread out between the owners, one may feel less risk is being taken. 2. Income Taxes General partnership may also benefit from pass-through taxation, meaning the partners are taxed like sole proprietors. Business income is reported on the personal tax filing while business losses can be deducted to reduce personal tax liability. The partnership itself is not subject to federal income tax. However the partnership needs to file an information return utilizing the IRS Form 1065. 3. Longevity or continuity of the organization Once the partnership agreement is fulfilled, the general partnership may dissolve. A buy/sell agreement may be included in the articles of the partnership to allow the

I think a partnership is the best business organization for a company. A Partnership consists of two or more individuals in business together. Normally, all general partners have an equal voice in management. Partnerships have many advantages, for example, Partnerships are relatively easy to form; No corporate income taxes. Partnerships declare income by filing a partnership income tax return. Yet the partnership pays no taxes when this partnership tax

Convenience/Burden- Like a general partnership a limited partnership is easily formed and can enjoy pass through-taxation. It can also be easier to get financing with a limited partnership. A downfall of the limited partnership is that the death of a general partner can dissolve the partnership unless a prior agreement has been established.

Besides the sole proprietorship after reading I learned about three basic types of business organizations known as limited liability (LLC), partnership, and corporation. Sole proprietorship is a “business owned and operated by a single person. The business has no separate legal existence from its owner.” (Rogers, 2012) In the textbook it said “Partnership is an association of two or more competent persons to carry on a business as co-owners for profit. The business itself is not a legal entity.” (Rogers, 2012) The law says competent means a partner having contractual capacity and a partnership where each partners simultaneously a principle and agent. You can partner up with a minor but be wise to emancipation or be cautions because minors can void partnership agreements. Partners of a business are owners and managers automatically unless specified otherwise by partners but according to the law they presume equal rights. “Note that while there can be unprofitable partnerships, there is no such thing as a nonprofit partnership. The partners must intend to make a profit.” (Rogers, 2012)

Proprietorships have three advantages: they are easy and inexpensive to form, subject to few regulations, and no corporate income taxes. The disadvantages are difficult to raise capital, unlimited liability and limited life. Partnership are similar to proprietorships in that they can be stablished relatively easily and inexpensively. The partners are generally subject to unlimited personal liability, this makes it difficult for partnerships to raise large amount of capital. Corporation also have unlimited lives, and easy transfer of ownership, limited liability and ease of raising capital to operate larger businesses. The disadvantages are double taxation, the corporation’s earnings are taxed; and then when its after-tax earnings are paid out as dividends, those earnings are taxed again as personal income to the stockholders. Limited liability reduces the risks endure by investors; and other things held constant, the lower the firm’s risk, the higher its

A partnership is a business that has 2 or more people working in it like Starbucks is a business that is in a partnership. The advantages are you have more capita available to you and the company you have combined skills with other workers simple to set up you have tax advantages the disadvantages are unlimited liability you have to share your profit with the other owners you can have conflicts with owners or workers that do not agree partnership ends to death and possible

There are four main forms of business structures. The structures of business differentiate based on liability, tax implications, and what type of business is being evaluated when determining what structure to use. This paper will cover the advantages and disadvantages within the four types of business structures; Limited Liability Corporations, Corporations, Partnerships, and Sole Proprietorships.

One of the most important decisions when starting a company is to determine the type of legal entity best suited for your business. Each country has different legal business entities under its regulatory framework. According to Dewhurst (2014), the most common types of business structures within the United States are: proprietorship, partnership, corporation, limited-liability company, and cooperative. Additionally, there are other types of legal entities derived from the association of different corporations, such as joint ventures.

Manager’s of an organization has to use structure to help the company run efficiently. “The five types of organizational structures are functional, divisional, matrix, team-based, and virtual network” (Draft, 2013, p.316). Functional structure in an organization that is developed by grouping departments by the skills, level of knowledge, activities done daily, and the resource used. “This structure places specific departments from the bottom to the top” (Draft, 2013, p.318). For example, specific departments such as: human resources, accounting, engineering, and manufacturing are placed at the top, while there are mostly seen at the bottom in other organizations. While common functions such as; people, facilities, and other resources are combined together as a single department instead of being divided into multiple departments.

There are a number of forms of ownership that the business can take. The main forms are sole proprietorship, partnership, Limited Liability Corporation, corporation and S corporation. There are advantages and disadvantages to each of these forms that will be discussed in this section. A sole proprietorship essentially has the person as the business. In this situation, the proprietor bears all of the risk involved in the business. Business income flows through to the proprietor's personal taxes. For some individuals there are tax advantages, but for many the appeal of the sole proprietorship is its simplicity. The IRS defines a partnership as a relationship existing between two or more individuals who joint to carry on a business. Partners divide income according to their own agreement and that income flows through to their personal taxes. Partners also have a high level of liability for any legal action that befalls the company.

Firstly, even though there are different types of partnership such as general, limited and limited liability partnership. This three different type has its advantages and disadvantages however we will be mainly focused on general partnership. One advantage of the general partnership is raising capital due to the nature of the business the partners will raise capital to start-up the business. Therefore more partners mean more capital can be put to the business, this allows the business to have more potential for growth and profitability. Another advantage is that a partnership is less complicated to form and run than a company they don’t have legal filing requirements, this means they don’t have to file accounts and documents with Companies House.

After suitable research,briefly explain the structure of business organisations and give the legal requirement as far as informing stakeholders as to the business financial activities.