Describe the three major forms of business organizations.

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Answer 1

Question

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

Chapter 11, Problem 1Q

To determine

Describe the three major forms of business organizations.

Expert Solution & Answer

Explanation of Solution

Forms of business organizations:

Fundamental Financial Accounting Concepts, Chapter 11, Problem 1Q

Sole proprietorship: It is one form of simple business that is owned and maintained by a single person. Obtaining business licence from the local government is required to setup the sole proprietorship. Government provides tax advantages for these firms.

Partnership: Partnership firms are started by two or more individuals joining together. This form of partnership is very easy to form and there is a shared control. The duties and formalities of the concern are formalized by making a partnership agreement. In this type of business organization, individuals with similar interest join together and start-up a business. As previously stated for sole proprietorship, partnership firms too enjoy tax advantages.

Corporation: Corporation is a form of business organization which is created and organized as per the laws of the state. There is a separate legal entity in this form of business organization that means, it is owned by shareholders and managed by a board of directors. The transfer of ownership and raising funds are easy in this form of organization. No personal legal liability exists among the shareholders.

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Answer 2

Question

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

Chapter 11, Problem 1Q

To determine

Describe the three major forms of business organizations.

Expert Solution & Answer

Explanation of Solution

Forms of business organizations:

Fundamental Financial Accounting Concepts, Chapter 11, Problem 1Q

Sole proprietorship: It is one form of simple business that is owned and maintained by a single person. Obtaining business licence from the local government is required to setup the sole proprietorship. Government provides tax advantages for these firms.

Partnership: Partnership firms are started by two or more individuals joining together. This form of partnership is very easy to form and there is a shared control. The duties and formalities of the concern are formalized by making a partnership agreement. In this type of business organization, individuals with similar interest join together and start-up a business. As previously stated for sole proprietorship, partnership firms too enjoy tax advantages.

Corporation: Corporation is a form of business organization which is created and organized as per the laws of the state. There is a separate legal entity in this form of business organization that means, it is owned by shareholders and managed by a board of directors. The transfer of ownership and raising funds are easy in this form of organization. No personal legal liability exists among the shareholders.

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Answer 3

Question

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

Chapter 11, Problem 1Q

To determine

Describe the three major forms of business organizations.

Expert Solution & Answer

Explanation of Solution

Forms of business organizations:

Fundamental Financial Accounting Concepts, Chapter 11, Problem 1Q

Sole proprietorship: It is one form of simple business that is owned and maintained by a single person. Obtaining business licence from the local government is required to setup the sole proprietorship. Government provides tax advantages for these firms.

Partnership: Partnership firms are started by two or more individuals joining together. This form of partnership is very easy to form and there is a shared control. The duties and formalities of the concern are formalized by making a partnership agreement. In this type of business organization, individuals with similar interest join together and start-up a business. As previously stated for sole proprietorship, partnership firms too enjoy tax advantages.

Corporation: Corporation is a form of business organization which is created and organized as per the laws of the state. There is a separate legal entity in this form of business organization that means, it is owned by shareholders and managed by a board of directors. The transfer of ownership and raising funds are easy in this form of organization. No personal legal liability exists among the shareholders.

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Answer 4

Question

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

Chapter 11, Problem 1Q

To determine

Describe the three major forms of business organizations.

Expert Solution & Answer

Explanation of Solution

Forms of business organizations:

Fundamental Financial Accounting Concepts, Chapter 11, Problem 1Q

Sole proprietorship: It is one form of simple business that is owned and maintained by a single person. Obtaining business licence from the local government is required to setup the sole proprietorship. Government provides tax advantages for these firms.

Partnership: Partnership firms are started by two or more individuals joining together. This form of partnership is very easy to form and there is a shared control. The duties and formalities of the concern are formalized by making a partnership agreement. In this type of business organization, individuals with similar interest join together and start-up a business. As previously stated for sole proprietorship, partnership firms too enjoy tax advantages.

Corporation: Corporation is a form of business organization which is created and organized as per the laws of the state. There is a separate legal entity in this form of business organization that means, it is owned by shareholders and managed by a board of directors. The transfer of ownership and raising funds are easy in this form of organization. No personal legal liability exists among the shareholders.

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Answer 5

Chapter 11, Problem 1Q

To determine

Describe the three major forms of business organizations.

Expert Solution & Answer

Explanation of Solution

Forms of business organizations:

Fundamental Financial Accounting Concepts, Chapter 11, Problem 1Q

Sole proprietorship: It is one form of simple business that is owned and maintained by a single person. Obtaining business licence from the local government is required to setup the sole proprietorship. Government provides tax advantages for these firms.

Partnership: Partnership firms are started by two or more individuals joining together. This form of partnership is very easy to form and there is a shared control. The duties and formalities of the concern are formalized by making a partnership agreement. In this type of business organization, individuals with similar interest join together and start-up a business. As previously stated for sole proprietorship, partnership firms too enjoy tax advantages.

Corporation: Corporation is a form of business organization which is created and organized as per the laws of the state. There is a separate legal entity in this form of business organization that means, it is owned by shareholders and managed by a board of directors. The transfer of ownership and raising funds are easy in this form of organization. No personal legal liability exists among the shareholders.

Answer 6

Chapter 11, Problem 1Q

To determine

Describe the three major forms of business organizations.

Expert Solution & Answer

Explanation of Solution

Forms of business organizations:

Fundamental Financial Accounting Concepts, Chapter 11, Problem 1Q

Sole proprietorship: It is one form of simple business that is owned and maintained by a single person. Obtaining business licence from the local government is required to setup the sole proprietorship. Government provides tax advantages for these firms.

Partnership: Partnership firms are started by two or more individuals joining together. This form of partnership is very easy to form and there is a shared control. The duties and formalities of the concern are formalized by making a partnership agreement. In this type of business organization, individuals with similar interest join together and start-up a business. As previously stated for sole proprietorship, partnership firms too enjoy tax advantages.

Corporation: Corporation is a form of business organization which is created and organized as per the laws of the state. There is a separate legal entity in this form of business organization that means, it is owned by shareholders and managed by a board of directors. The transfer of ownership and raising funds are easy in this form of organization. No personal legal liability exists among the shareholders.

Answer 7

Chapter 11, Problem 1Q

To determine

Describe the three major forms of business organizations.

Answer 8

Expert Solution & Answer

Explanation of Solution

Forms of business organizations:

Fundamental Financial Accounting Concepts, Chapter 11, Problem 1Q

Sole proprietorship: It is one form of simple business that is owned and maintained by a single person. Obtaining business licence from the local government is required to setup the sole proprietorship. Government provides tax advantages for these firms.

Partnership: Partnership firms are started by two or more individuals joining together. This form of partnership is very easy to form and there is a shared control. The duties and formalities of the concern are formalized by making a partnership agreement. In this type of business organization, individuals with similar interest join together and start-up a business. As previously stated for sole proprietorship, partnership firms too enjoy tax advantages.

Corporation: Corporation is a form of business organization which is created and organized as per the laws of the state. There is a separate legal entity in this form of business organization that means, it is owned by shareholders and managed by a board of directors. The transfer of ownership and raising funds are easy in this form of organization. No personal legal liability exists among the shareholders.