Business Essay Topic: Forms of Business Organizations

930 WordsMay 21, 20134 Pages
Business Essay Topic: Forms of Business Organizations It is important that the business owner seriously considers the different forms of business organization — types such as sole proprietorship, partnership, and corporation. Which organizational form is most appropriate can be influenced by tax issues, legal issues, financial concerns, and personal concerns. This essay explains the general impression of business organizations. A Sole Proprietorship, also known as the sole trader or simply proprietorship, is a type of business entity that is owned and run by one individual and in which there is no legal distinction between the owner and the business. The owner receives all profits (subject to taxation specific to the business) and…show more content…
These articles include the name and address of corporation, objectives of the corporation, classes of stock, and financial capital required at time of incorporation. There are many types of corporations such as domestic corporation, foreign corporation, alien corporation, private corporation, public corporation, initial public offering, quasi-public corporation, and non-profit corporation. The elements of corporation include: a board of directors, preferred stock, and common stock. There are many advantages and disadvantages of corporations. The advantages are: limited liability, transfer of ownership, perpetual life, external sources or funds, and expansion potential. The disadvantages are: double taxation, forming a corporation, disclosure of information, and employee-owner separation. Other types of business ownership include; a joint venture which is a partnership established for a specific project for a limited time. S- Corporation which is a corporation taxed as though it were a partnership (no double taxation) with restriction on shareholders. LLC which is a flexible form of enterprise that blends elements of partnership and corporate structures. Co-op which is an organization of individuals or small businesses that have banded together to reap the benefits of belonging to a larger organization. Mergers which is the combination of two companies
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