...Forms of Business Ownership Characteristics Sole Proprietorship: The business and the owner are the same entity; there is no distinction between the two. It is very easy to start-up. It can be difficult to raise working capital. • Liability – The business owner is fully liable for all business debts. • Income Taxes – All profits or losses are passed through the business to the business owner. The business owner reports profits or losses on their individual income tax reports. The business itself is not taxed as an entity. • Longevity or Continuity of the Organization – Generally, the business ends if the owner dies or stops conducting business activities. The business owner can have plans and authorizations in place that would allow the business to continue. • Control – The business owner has complete authority in the daily management of business operations. There are no partners. • Profit Retention – Profits or losses go to the business owner. • Location – To do business outside of its original state, the sole proprietorship will file a Doing Business As statement in each state it intends to do business. Foreign qualification is not required. • Convenience or Burden – The business owner may have to file for state and/or local permits. General Partnership: Two or more people decide to do business together. The business and the owners are the same entity; they are not separated legally. It is very easy to start-up. It can be difficult to...
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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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...For a new or proposed business, the selection of a suitable form of ownership business organisation is generally governed by the following factors! The selection of a suitable form of ownership organisation is an important entrepreneurial decision because it influences the success and growth of a business — e.g., it determines the decision of profits, the risk associated with business, and so on. As discussed earlier, the different forms of private ownership organisation differ from each other in respect of division of profit, control, risk, legal formalities, flexibility, etc. Therefore, a thoughtful consideration should be given to this problem and only that form of ownership should be chosen. Since the need for the selection of ownership organisation arises both initially, while starting a business, and at a later stage for meeting the needs of growth and expansion, it is desirable to discuss this question at both these levels. For a new or proposed business, the selection of a suitable form of ownership organisation is generally governed by the following factors: 1. Nature of business activity: This is an important factor having a direct bearing on the choice of a form of ownership. In small trading businesses, professions, and personal service trades, sole-proprietorship is predominant. Examples are Laundromats, beauty parlours, repair shops, consulting agencies, small retail stores, medicine, dentist accounting concerns, boarding-house, restaurants, speciality ships,...
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...5–7 pages) about the forms of business organizations listed below. Your report should have a subheading for each business form with a brief description of the business form and a brief discussion of the key characteristics, advantages, and disadvantages of that form of organization. Differentiate among the following forms of business by explaining how at least six of the seven key characteristics listed in the introduction to this task apply to each of the following organizational forms: 1. Sole Proprietorship 2. General Partnership 3. Limited Partnership 4. C-Corporation 5. S-Corporation 6. Limited Liability Company SAMPLE FORMAT Sole Proprietorship: Write a brief description of the form of business ownership, advantages and disadvantages. The key characteristics of the form of ownership should be addressed by discussing six of the seven bullet points below. You will want to have the heading as the form of business ownership and then use the bulleted list below for the key characteristics. • Liability • Income Taxes • Longevity or Continuity of the Organization • Control • Profit Retention • Location • Convenience or Burden General Partnership: Write a brief description of the form of business ownership, advantages and disadvantages. The key characteristics of the form of ownership should be addressed by discussing six of the seven bullet points below. You will want to have the heading as the form of business ownership and then use the bulleted...
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...Forms of Ownership Business is the profitable activity in which the owner provides products or service to the customers in order to get profit. The main aim of the business is to make profit. The wrong decision on selecting the ownership affects the over all performance of the business. The business run by the one in order to take risk and profit is called the sole-proprietorship. The second form of the ownership is partnership which include more than two business partner in the firm. Corporation is the third form of the business ownership which is entity where the shares are sold, governed by the law and working as a unit. Sole proprietorship is the form of the business ownership in which the whole business activity is run by the single person. The legal requirements for this ownership are minimal and it’s easy to organize. It is run by the single person and he/she has the full control over the activities. The earnings in a proprietorship are considered to be personal income. The profit goes to the owner himself as he is taking the risk. The sole proprietorship bears all the losses and also bears unlimited liability. As he runs the business himself he has limited funds and limited skills. The business in which there is multiple owners where the profit and the losses are shared by each of the owners is called the partnership form of the ownership. In this form as there is involvement of multiple owners they get additional funds. The business gets more specialization...
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...LIT 1 – Task 1 | SUBDOMAIN 310.1 - BUSINESS LAW | Competency 310.1.2: Organizational Forms | | | | The following report will summarize the key differences between the various forms of legal business entities. The ownership forms covered will include sole proprietorship, general partnership, limited partnership, C-corporation, S-corporation, and Limited Liability Company. Also included will be a brief recommendation of the most appropriate form of ownership for the given manufacturing business. | Section A- For each of the various forms of business ownership, a brief description outlining the basic impact on the following criteria will be given; * Liability * Income Taxes * Longevity or continuity of the organization * Control * Profit Retention * Location * Convenience or burden Sole Proprietorship Perhaps the most common form of business ownership, sole proprietorship, is generally the simplest form of business ownership due to the lack of separation between the entity and the individual. While there are positive and negative implications to any form of business ownership, these are generally more exaggerated in the instance of sole proprietorship. The ease of formation and ownership and limited regulation are strong benefits, however, the negative aspects are far greater than in any other form of ownership. The first negative ramification is the lack of ability to continue the company after the owner either becomes unable or...
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...Business is the profitable activity in which the owner provides products or service to the customers in order to get profit. The main aim of the business is to make profit. The wrong decision on selecting the ownership affects the over all performance of the business. The business run by the one in order to take risk and profit is called the sole-proprietorship. The second form of the ownership is partnership which include more than two business partner in the firm. Corporation is the third form of the business ownership which is entity where the shares are sold, governed by the law and working as a unit. Sole proprietorship is the form of the business ownership in which the whole business activity is run by the single person. The legal requirements for this ownership are minimal and it’s easy to organize. It is run by the single person and he/she has the full control over the activities. The earnings in a proprietorship are considered to be personal income. The profit goes to the owner himself as he is taking the risk. The sole proprietorship bears all the losses and also bears unlimited liability. As he runs the business himself he has limited funds and limited skills. The business in which there is multiple owners where the profit and the losses are shared by each of the owners is called the partnership form of the ownership. In this form as there is involvement of multiple owners they get additional funds. The business gets more specialization as the ideas and the...
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...Consultant 1. Which form(s) of ownership would you recommend to the Kinseys? Explain. Due to the Kinsey's desire to minimize their exposure to potential legal and financial problems, their choice of ownership should be a corporation. 3. What factors should the Kinseys consider as they try to choose the form of ownership that is best for them? Students should list and briefly discuss the factors that every entrepreneur should consider prior to making a final decision on the form of ownership like: taxes, liability, capital, business goals, management succession and so on. Discussion Questions 1. What factors should an entrepreneur consider before choosing a form of ownership? Factors to be considered before choosing a form of ownership include: * Tax considerations – calculate the firm's tax bill under each form of ownership. * Liability exposure - how much personal liability is involved in the ownership form? * Start-up capital required - how much capital does the entrepreneur have and how much will he need? * Control - how much control is involved for each type of business organization? How much is the entrepreneur willing to give up? * Business goals - how large and profitable does the entrepreneur expect the business to be? * Management succession plans - consider smooth transition when passing company to the next generation of buyers. * Cost of formation - some forms are more costly to create. ...
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...Describe the characteristics of the four basic forms of business ownership. A sole proprietorship is a business that is owned, and usually managed, by a single person. A partnership is a voluntary arrangement under which two or more people act as co-owners of a business for profit. A corporation is a legal entity created by filing a document with a state agency also known as the articles of incorporation. A corporation is considered to be a separate and distinct from its owners, who have a limited liability for the debts of their company. A limited liability company is a relatively new form of business ownership that, like a corporation, offers limited liability to its owners. However, LLCs offer more flexibility in tax treatment and simpler operating requirements. Discuss the advantages and disadvantages of a sole proprietorship A sole proprietorship is the simplest and least expensive form of ownership to establish. It offers the single owner the flexibility of running the business without having to seek the approval of other owners. If the business is successful, the sole proprietor retains all the profit. The earnings of a sole proprietorship are taxed only as income of the owner with no separate tax levied on the business itself. A key disadvantage of a sole proprietorship is that the single owner has unlimited liability for the debts of the business. The sole owner also must often work long hours and assume heavy responsibilities. Sole proprietorships as normally have...
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...33611 Re: Different forms of business entities Dear Betty and Betsy, The purpose of this correspondence is to address your inquiries regarding your new business endeavor pertaining to natural ice cream and potential investors. Our understanding of your business endeavor is as follows: 1) opening of an ice cream parlor 2) potential investor, that is a Chinese citizen 3) potential business, may have an interest in investing. In your scenario presented, I would like to discuss the different forms of business entities that can be established along with factors to consider when choosing a business form. Factors to Consider when Choosing a Business Form * Ownership and Control * Liability * Taxation * Expenses involved in formation * Capitalization * Liquidity Different forms of business entities (Pros and Cons) Solo Partnership *Business owed by a single person *No Formation requirements at all… just open doors and start operating *Can contain employees; but on person has complete ownership and all decision making power *Taxation: All profits are considered personal income; there is no separate entity of the business itself *Liability: Fully liable for all corporate debts Advantages: (1) Total Control (2) Simplicity of Formation Disadvantages: (1) Difficulty in raising capital (2) Unlimited Liability for business debt (3) Very low liquidity in ownership of business General Partnership * One or more people have ownership stakes in the business * Partnership is a...
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...successful business, we will discuss ownership, and funding of a business. We will look at the pros and cons of partnership as a form of ownership. We will look at accounting practices, and marketing of the business to the consumer. We will look at how technology has changed the business and marketing environment and a company’s social and environmental responsibility. Starting, Financing, and Marketing a Business A business is any activity that provides goods and services in an effort to earn a profit (Mcgowan, Kelly and; 2012) There are many aspects to a successful business, an idea for a product or service that is needed or wanted by the consumer. After the idea, comes finding a way to fund the business, develop the idea, and a good marketing and distribution plan. Good accounting practices are a must to keep track of how the business is doing. There are four major forms of business ownership. * If just one person owns the business, it is a sole proprietorship. In this form of business the owner has all the say in how the business is run, and keeps all the profit. The owner is also responsible for all debts the business incurs. * A partnership is an agreement between two or more people that act as co-owners there are several types of partnership, but in a basic partnership, owners share profits, and liabilities * A Cooperation is a business that is created to be separate from its owners. This protects owners from debts and obligations that the business incurs...
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...Student Number: Module: Tutor: INVESTGATION BUSINESS ASSIGNMENT INVESTGATION BUSINESS ASSIGNMENT Abstract: Abstract: Table of Contents 1 Assesment outcomes: 4 2 Introduction: 4 3 Aims and Objectives of the project: 5 3.1 TESCO 5 3.2 YO SUSHI 6 Small brief about yo sushi 6 3.3 UICEF 7 Unicef is a charity, work to protect child rights, UNICEF UK established in 1956 and is one of 36 UNICEF National Committees based in industrialized countries. It is a charitable company limited by guarantee and is governed by a Board of Trustees. The Board meets regularly to discuss governance matters, including the charity’s vision, mission and strategic direction. 7 3.4 The Comparison Table 8 4 Report Brief: 9 5 Forms Of Ownerships: 10 5.1 Selection of organization 10 5.2 General Discription: 10 5.3 Historical Changes or Developments Explanation: 10 6 Pros. And Cons. Of Organization Ownership: 10 6.1 Definition of Current Ownership: 10 6.2 Comparison between different forms of Ownerships: 10 6.3 Comparison of Advantages and Disadvatages of curret ownership: 10 6.4 Discussion of Recommended Changes to current form: 10 7 Pros. And Cons. Of Organization Structure: 10 7.1 Definition of Current Structure: 10 7.2 Comparison between different forms of Stuctures: 10 7.3 Advantages and Disadvantages of current Sturcture: 10 7.4 Discussion of Recommended Changes to current form: 10 8 Key Stakeholders identification: 10 ...
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...AO1 - Type of Business Ownership Introduction There are many different types of ownerships that can indicate the size of the business. Businesses can range from small, being a one person business or a larger business such as a supermarket that have hundreds of employees. In this report I am going to discuss and research the different forms of business ownerships and the legal requirements that are required. I will be talking about what each type of owner ship in tales and what the advantages and disadvantages of each are. The main types of ownerships are: * Sole trader * Partnership * Private Limited Company * Public Limited Company * Franchise * Working Co-operative I am going to research the different types of ownerships using the internet and text books to gain an understanding of what each type of ownership consists of. This will therefore help me gain a wider and deeper knowledge and understanding of aspects of each ownership, for example the advantages and disadvantages. Sole trader A sole trader is the smallest and simplest form of business ownership and consists of very few legal requirements which is why it is one of the most common within the UK with over 3 million business running. Sole traders are businesses that are started by only one individual and they will be one legal owner of the business, however they may employee people to work for them. Being the only legal owner give great amount of freedom, they will be their own boss...
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...THE BUSINESS ENVIRONMENT - LEGAL, SOCIAL, and ECONOMIC ENVIRONMENTS of BUSINESS Ladybud2u AIU As a small business and new business owner there are questions that instantly come to mind. Which form of ownership should one take with incorporating a business; now there are three forms of ownership, the sole proprietorship; a partnership; or a corporation. Being that one may have little to no financial and management skills, no net worth, no idea of what start-up funds one will need, one will still keep their spinning wheels. When one know there are similar products out in the market in comparison to their invention, they know that eventually they will generate significant sales that can be incorporated into today’s technology right along with other products in the marketplace. With all of this in mind it has cause many to research about the best form of ownership with the business that they wish to incorporate. Anyone can see that the simplest and most common form of ownership for a new business owner is a sole proprietorship. This form of business is ideal for an individual owner, who can manage and own the business with full responsibility for all business transactions. If one wish to incorporate there spouse or a family member later in the business they can than form a limited partnership which will allow a partner to invest money but not have the management responsibility and the formalities that are set forth by the Revised Uniform Limited Partnership Act (RULPA)...
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...Title: Ownership Forms of Health Care Organizations Class: MHA612: Financial & Managerial Accounting There are many common ownership forms that are available to form a health care organization. So when asked to advise fifty doctors on what common ownerships forms there are you must first think of what organization of health care you plan to open. Working on the capacity as an external consultant in the field is common to give guidance and provide feedback to any ideas that can help improve the way to do things. To have a better outlook on how things can be done 50 doctors have gathered together to come up with ideas on developing ownership form for their organization. The job is to oversee the ideas and ensure them that the ideas they are coming up with are practical ideas that shows a good understanding of the various common ownership forms that they can use as well as give them a detail briefing of the common ones they shouldn’t use. There are four main types of organizations they are Not for profit business oriented organizations, for profit health entities which include Investors owned, professional corporations/ professional associations, sole proprietorships, limited partnerships and limited liability partnerships and limited liability companies. Governmental HCOs and Non-governmental nonprofit HCOs. These four main types of firms differ in terms of ownership structures. They are different HCOs that require slightly different sets of financial statements. Health...
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