Purchase Solution

Forms of Business Organization

Not what you're looking for?

Ask Custom Question

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?

Purchase this Solution
Solution Summary

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?

Solution Preview

In general, the available forms of business include the sole proprietorship, the general partnership, the limited partnership, and the corporation. Each of these forms of business enterprise are recognized in the State of Michigan and are generally adaptable to the specific needs of a start-up or emerging business. The impact of certain of these important considerations among the available forms of business are discussed below.

The sole proprietorship is a simple form of business enterprise which is the most widely used. The distinguishing characteristic of a sole proprietorship is that it is owned and managed by one person. The individual proprietor has the ultimate responsibility and authority for all decisions affecting the business. Generally, no legal formalities are necessary to create an enterprise in this form. With the exception of a very nominal filing and publication cost associated with an assumed name certificate, there are no state or local taxes or fees payable for the privilege of organizing as a sole proprietorship. Sole proprietors are personally liable for the debts of the proprietorship.

A general partnership is created by agreement, either oral or written, and the relations of the partners are governed by that understanding. Partners typically agree to share in the profits, losses, and assets of the partnership. Apart from the agreed upon duties and liabilities of the partners, a fiduciary relationship also exists between the partners. Each partner is personally liable for the debts of the partnership, a feature which makes this business form undesirable to many entrepreneurs.

A limited partnership is similar to a general partnership in certain respects and similar to a corporation in others. A limited partnership is a business form in which, by complying with certain statutory requirements, one or more of the partners has only limited liability for partnership debts and obligations. The price for this liability protection is a limitation on participation in management.

A corporation is a legal entity created under a particular business statute. The entity may be ...

Solution provided by:
Sandeep Bardia, MBA
Education
  • BCom, SGTB Khalsa College, University of Delhi
  • MBA, Rochester Institute of Technology
Recent Feedback
  • "Thank you. "
  • "Thank you"
  • "Thank you. I got 20/20 last week for my discussion you help me out with."
  • "Thank you. Great Job. "
  • "Thank you. Great Job. "
Purchase this Solution
Free BrainMass Quizzes
Organizational Behavior (OB)

The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.

Operations Management

This quiz tests a student's knowledge about Operations Management

Employee Orientation

Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.

Team Development Strategies

This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.

Writing Business Plans

This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.

View More Free Quizzes
Related BrainMass Solutions

  • Differentiate between the three major organizational forms

    A sole proprietorship form of business organization is the one in which the company is owned by a single individual (Dornseifer, 2005). This form of business organization is the simplest of all.

  • Forms of business organization

    313472 Advantages and disadvantages of the three forms of business organization What are the three forms of business organization and what are the advantages and disadvantages of each form?

  • Important information about Legal forms of business

    Starting a business: Legal forms of organization. Retrieved from econ.org/entrepreneurs/Lesson%202%20Business%20Organization.doc Advantages and disadvantages of legal forms of business

  • Three forms of business organization

    because of the varies in their interests or views (COMMON FORMS OF BUSINESS ORGANIZATION).

  • Strategic Management

    There are various forms of communication in an organization, such as newsletters, business letters, memos, notices, speeches, agenda, mission statements, news reports, special announcements, bulletin boards, meetings, announcements, corporate events,

  • Forms of Business Organization

    88141 Form of Business Organization 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?

  • Importance Of Communication In Business

    Forms of organizational structure. Retrieved from http://yourbusiness.azcentral.com/forms-organizational-structure-3002.html Understanding the importance of communication in business and the types of business ownership

  • Three Forms of Business Organizations in the USA

    487653 Three Forms of Business Organizations in the USA Problem 1 Discuss the three forms of business organization in the United States.

  • There are many forms of organization which may be used by in

    449140 C and S Corporation Forms There are many forms of organization which may be used by individual taxpayers to operate a business. The forms for a corporation include the regular C corporation and the S corporation.

  • Buisness Organizations

    97549 Buisness Organizations 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?

View More Related Solutions