Business Organizations : Business Organization

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Business Organizations
Task 1
7/14/15

Business Organization
Essentially, a business organization is a body that is formed for the aim of conducting a commercial enterprise (Bank, 2004, p. 2).
Sole Proprietorship
Brief Description
A sole proprietorship is a form of business structure that is owned and operated by the same owner simultaneously (Schneeman, 2012).
Characteristics
• In this type of entity, it is difficult to draw a distinction between the owner and the business.
• In the legal language, they are not incorporated and many a times not entirely viewed as a business structure because there are no legal regimes governing their set up.
• The owner is generally vested with absolute control of the enterprise and will be the sole employee.
• The business structure is widely used by small investors due to the easy to set up nature.
Advantages
1. Compliance: the creation of sole proprietorship is not dictated by any legal formalities or requirements. There running is also governed by few legal requirements. In essence, the creation and running of such an entity involves less administrative expense (Schneeman, 2012).
2. Control: the owner of a sole proprietorship has absolute control over the business and the decisions that are made. However, this does not mean that the owner cannot make any transfer of the sole proprietorship.
3. Tax benefits: unlike in incorporated entities, sole proprietorship are not taxed separately from the owner, they are absolved from
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