Business organization is the most important choice in a company. What form your business adopts will affect a horde of factors. Many of these factors will decide your company’s future. Bringing into line your goals to your business organization type is a significant step. Understanding the types of business organisations is vital.
There are 4 main forms of business organization. These include sole proprietorship, partnership, corporation, and Limited Liability Company, or LLC. Here are details of each of the business organisations.
This is the simplest and most common form of business ownership. Sole proprietorship is a business owned and run by an individual for their own profit.
The business’ survival is entirely reliant on the owner’s decisions.
Advantages of sole proprietorship:
The owner decides what to do with profits and there is very little regulation for proprietorships. The business has few requirements for starting.
The owner is 100% liable for business arrears and its equity is restricted to the owner’s personal resources. Also, ownership of proprietorship is difficult to transfer. Many casinos in america are sole proprietorship.
They come in two types which are general and limited. In general partnerships, both owners invest their money, property, labor and many other things to the business and are both 100% accountable for business debts. Limited partnerships involve an official agreement between the partners. Limited partnerships allow partners to limit their personal liability for business debts according to their portion of ownership or investment.
Advantages of partnerships:
A shared resource provides more capital for the business and each partner shares the total profits of the company.
Each partner is 100% responsible for debts and losses. Selling the business is difficult as it requires finding a new partner. Also, the partnership ends when any partner chooses to end it
They are for tax purposes because they are separate entities and are considered a legal person.
This means that the profits generated by a corporation are taxed as the personal income of the company. However, there are some real money online casino games companies that fall under this category.
They limit liability of the owner to debts or losses. Also, profits and losses belong to the corporation.
Corporate operations are costly