Business Organizations
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What are the three forms of business organization and what are the advantages and disadvantages of each form? For a corporation, what is the overall goal of the financial manager? What is the objective of this firm? Do you agree with this goal? Why or why not?
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//Before understanding the concept of business, it is necessary to have clarity on the type of business organizations that exist in the today's dynamic environment. Business organizations are the legally distinguished organizations that are meant to provide the goods and services to consumers. So, below are the description of some major Business Organizations //
Sole Proprietorship
A sole proprietorship is a form of organization, which is operated by a single person alone. He or she is the sole owner of the business. He manages his business either alone or with a staff of few people. In some cases, the family of the sole proprietor may also be involved with him in doing the business. He or she will have unlimited liability for all debts of the business, and the income or loss from the business will be his own and not shared by anyone. It will be reported on his or her personal income tax return along with all other incomes and expenses that are generally reported by him or her (though it will be on a separate schedule). This form of business is less expensive because it avoids the expense of forming a partnership or corporation, but many people start a sole proprietorship concern because they are unfamiliar with the other forms of organizations.
//Above discussion provides the detailed information regarding its operations and total number of staff. Moving further, it is necessary to understand various advantages provided by this business organization. Below are some advantages: //
? The person is the sole owner.
? He has full and direct control over the business and has no interference form anyone.
? It involves fewer amounts of costs. It does not involve as high costs as in a partnership or company.
? It has a few governmental organizations.
? Whatever profit he earns (after paying for all the expenses of the business) from the business is his own and not to be shared with anyone else.
//Advantages and Disadvantages serves as two sides of the coins. So, it is also necessary to look at the disadvantages of operating with the Sole Proprietorship business organization. Some of the disadvantages are explained below//
Disadvantages
? The life of the proprietorship is limited to the life ...
Education
- MBA (IP), International Center for Internationa Business
- BBA, University of Rajasthan
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