Organizational Forms Essay Example | Topics and Well Written Essays - 1750 words

Organizational Forms - Essay ExampleThe major characteristics of furbish up proprietorship be as follows indebtedness Liability is the biggest disadvantage in resole proprietorship organizational form. In sole proprietorships, if the business sector suffers huge amount of dues which can non be recovered from revenue, the owner will be personally apt for paying the entire amount. On the flip side, if proprietor possesses unpaid dues, the creditors can even realize those from the business assets (McGuire, timberland & McLean, n.d.). Income tax Sole proprietorship business is a taxable unit. In this business form, in that respect is little opportunity for tax planning, as the owner is completely liable to pay all the taxes derived by means of income (McGuire, Woods & McLean, n.d.). Longevity or continuity of the organization The longevity of sole proprietorship business depends mostly on the existence of its owner (Beatty, Samuelson & Bredeson, 2012). Control In sole proprieto rship, the business owner has the entire check into over the resources and business decisions which is a significant advantage of sole proprietorship (AllBusiness, 2007). Profit retentiveness The some other advantage of sole proprietorship business is that it allows the business owner to enjoy complete profit retention (McGuire, Woods & McLean, n.d.). ... p business is quite easy to set-up with minimum capital however, it significantly depends on the financial ability of the proprietor (McGuire, Woods & McLean, n.d.). General Partnership General federation is the second type of organizational form which denotes business relationship between individuals forming independent organization through mutual contracts. Liability Liability is an advantage in general partnership because each business associates are mutually and individually amenable for every facet of the business including profit/loss or major decisions (McGuire, Woods & McLean, n.d.). Income taxes Similar to sole prop rietorship, general partnership organizational form has a single level of taxation. This type of business does not fall under the taxable unit, rather it is considered as a tax reporting unit (McGuire, Woods & McLean, n.d.). Longevity or continuity of the organization Longevity is a significant disadvantage of general partnership. thither is supposed to be specific time duration for the term of general partnership. The longevity of general partnership depends on the contract. Whenever a partner is discharged from the contract, the other existing partners can take over the unemployed place or they can even decide to wind-up the complete business (McGuire, Woods & McLean, n.d.). Control individually business associates possess equal level of control on business decisions (McGuire, Woods & McLean, n.d.). Profit retention Business associates share the gross profits in between themselves and are taxed independently (McGuire, Woods & McLean, n.d.). berth The taxation in general partner ship relies on the principal regulations location where revenue has been generated (Beatty, Samuelson & Bredeson, 2012). Convenience or burden A common burden in general