Business Organisations

Business Organisations



Types of Business Organisation

Introduction

There are various types of business organisation and is it, therefore, essential for entrepreneurs to choose the business as per the requirement as financial ability they can sustain. When systematizing a business or entering into a new business it is important to base the opting the type of the structure of the business one wants to run. It is essential for to inquire the vision one the person regarding the size along with the nature of the business. The process of making or selecting a business type is based on the decision having long-term propositions. It is therefore; people make it a point that consulting the work with an attorney as well as an accountant will help in selecting the right type of ownership for the businessman or Entrepreneur (David et al, page 8-46).

Mainly the type of business or the various forms of business one has to opt and run depends on the ability of an individual and the potential he or she has to make the business run. Many times it also depends on the mind set on the people as to what type of business they opt.1. The echelon of composition the person prepare to deal and work through2. The business exposure towards court case and proceedings.3. Level of power and command the businessman or entrepreneur wish to encompass.4. The implications of Taxes divided on the diverse structures of the ownership.5. The strength to afford and bear the projected profit as well as loss related to the business.6. Re-investing of earnings into the business.7. Requirement for methods to cash-out of business.8. Risk averting that base on the personal assets from business legal responsibility.9. Any other partner in the business or any family member investing in the business (Sara, page 16-53).Following are the various forms of ownership of the business: 1) Sole Proprietorship2) Partnership3) Corporation4) Cooperative

1) Sole Proprietorship

Majority of the small and medium size businesses start as a sole proprietorship, where it is essential for the person to know the various points i.e. the legal and financial liabilities related in running the business. In a sole proprietorship, the firms or business owned by an individual, having day-to-day responsibilities and liabilities so as to run the business. Not only are the liabilities owned by the owner but all the profit as well as the assets also owned by the owner solely. Hence the owner also presupposes absolute individual accountability elated to the liabilities and even the debts taken for the business. In legal terms, the main owner of the business is only one person and thus it cannot be shared by some other or else the form of business will change. Following are the some of the advantages and disadvantages of a sole proprietorship:

Sole Proprietorship Advantages

Trouble-free and not an expensive type of ownership

Only one person that is the sole proprietor is controlling the law as well as taking all the decisions on their own.

The Sole proprietor collects all the revenues produced through the business and solely depends on him to reinvest or ...