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Organizational Structure of Single Entity Organizations

What are the advantages of an organization existing as a single entity?

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A single entity business is a business that is owned and managed as one entity. There may be other persons involved in the business, but they will be employees or agents of the owner. While the owner may delegate certain management or supervisory powers to employees or agents, the source of delegated authority must come from the owner. Non-profit organization also can be considered single entities

The entity types available to a single entity business include a sole proprietorship, an S corporation, a C corporation, and, in some states, a limited liability company. The advantages and disadvantages afforded a single entity business with each of these types are as follows:

Sole Proprietorship- The advantages of a sole proprietorship are:
(1) there are few, if any, organizational (start-up) expenses;
(2) for income tax purposes, the profits and losses of the business are those of the owner which means that business losses are deductible by the owner in the year the are incurred and the business profits are not taxed twice;
(3) the owner can organize and manage the business without statutory restriction; and
(4) the owner is not required to register the business with any public official, file any reports ...

Solution Summary

This solution explains the main advantages of an organization existing as a single entity.