Smith's Tile & Granite Flooring Company: we install all forms of flooring and work with construction companies in rehabs. The company focuses on working from referrals in the Tri State Area. Most referrals come from builders, Lowes Home Improvements and other home owners. Services include flooring of all types on new construction and rehabs.
*How does the different organizations operate in the global legal environment and identify the domestic & global legal issues that could impact the business structure and how to manage these issues?
Company is make believe and only general ideas for answers needed.
*Can you help me understand the differences between the strengths & weakness of the different business organizations and determine which best suits the business venture?
There are six different types of organizations that we consider
The sole proprietorship:
The strengths include the ease of starting the business, there are no forms that need to be filled, the identity of the business is not different from that of the owner (proprietor), the income and expenses simply have to be filled up in form 1040 Schedule C for income tax purposes and this is very easy to dissolve.
The main weakness of this business is the problem of unlimited liability that comes with this business. Moreover, the financial strength is limited to the financial strength of the person running the business.
In an unlimited partnership the extra advantage is that a larger number of partners bring in more expertise, ability and capital. The partnership is not taxed direct but the income of the partners is taxed.
There is unlimited liability of the partners and there are limitations on the extent of capital the firm can raise.
Limited Liability Partnership:
Strengths: This has advantages of partnership and company. The shareholders can directly manage the company and on the other hand they do not have limited liability.
Weaknesses: In some states this form provides limited protection against negligence charges against LLP. On the other hand contract and intentional ...
This posting discusses the strengths and weaknesses of different business organizations and shows you which organization suits a particular venture.