Forms of Business Ownership There are basically four ways to organize a business. • Sole Proprietorship • Partnership • Corporation 1.Sole Proprietorship A sole proprietorship, also known as the sole trader or simply a 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 sole proprietor form of business ownership is the most common form in the United States and also the simplest. In
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McGee Cake Company case study presented a situation where a sole proprietorship is being forced to make a tough decision due to its rapid growth. The McGee’s simply do not have the resources to meet the demands of their cliental. Therefore, they must look into restructuring their business in effort to remain afloat. As their business advisor, I would carefully explain the three different legal forms of business organization (sole proprietorship, partnership and corporation). I would begin by informing
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forms. * Sole proprietorship's * Partnerships * Corporations These are further sub divided into different forms. Each form have certain characteristics that set them apart and they also have some advantages and disadvantages. Let’s closely look at all three forms and analyze why one legal form would be selected over the other for a small business. 1. Sole Proprietorship: These are the most simplest and common way of doing business in the United States. A sole proprietorship is an unincorporated
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include: sole proprietorship, partnerships, and corporations. When starting a business, it is very important to weigh out the pros and cons of each type to decide which type would be best suit your particular business. Each type has its advantages and disadvantages that need to be considered before deciding which would be best moving forward. I will discuss the advantages, disadvantages, and differences of each type of firm. First, there is a sole proprietorship. “A sole proprietorship is someone
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organization change for Lamond Manufacturing. The types of business organizations I considered during my evaluation were a sole proprietorship, which provides autonomy and ease in creation, but is risky because of unlimited liability. The general partnership, which allows owners the opportunity to do business together, however, it carries the same unlimited liability as the sole proprietorship. The C-corporation provides limited liability for its owners, although, it can be problematic to manage, with numerous
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business organization will best suit the business chosen. Legal, tax, accounting, and other implications when selecting from the four business types are matters of considerations (University, 2008 - 2011). The four forms of business include Sole proprietorship, Partnership, C Corporation, and S Corporation. Discussion will explain advantages and disadvantages of the four forms of business, financial statement associated with each form of business organization, and the consequences of tax implications
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for the obligations of the corporate. It is likewise a form of company or partnership among two companies. Credentials of ownership are disputes by the business in reoccurrence for each input, and the investors are free to transmission their proprietorship concern at any time by vending their stockholding to others. Here are two types of joint-stock company, the open market and the private company. The stocks are typically only detained by the boards and Company Secretary, obligation for which
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individuals. The business would be a sole proprietorship because of the simplicity, and because the success or failure of the business is solely contingent on the owner’s actions not those of partner’s or shareholders. In addition, a sole proprietorship is not taxed at the corporate rate instead profits and losses are reported on schedule C of the owner’s personal tax return. Completing a schedule C, income statement, and balance sheet for a sole proprietorship is less complicated than completing
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merits and limitations, suitability and the steps involved in their formation. Y OBJECTIVES After studying this lesson, you will be able to: • • • • • explain the concept of business organisation; state the meaning and characteristics of Sole Proprietorship, Partnership, Joint Hindu Family Business and Cooperative Societies. identify the merits and limitations of these forms of business organisation; describe the suitability of these forms of business organisation; and explain the steps in the
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Sole Proprietorship * Liability – Sole Proprietorship offers unlimited liability which states that you as the owner are solely responsible for all debts from your personal assets. You can lose not only the money initially invested in the business but also personal assets. * Income Taxes – Due to you being the sole owner there is no separate business income tax filing for a business under Sole Proprietorship. Business income or loss is reported on the sole proprietor’s personal tax return
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