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These characteristics of the sole proprietorship distinguish it from a corporation and a limited liability company. A sole proprietor, for example, owns and manages a sole proprietorship, a feature that is different from observations in corporations and limited liability companies. More than one person, for example, owns a corporation or a limited liability company. These owners are called shareholders while the owner of a sole proprietorship is called the sole proprietor. Board of directors who are distinct from the businesses’ owners manages corporations while limited liability companies’ management is flexible. Another difference between the three forms of businesses is the owners’ liability over the organizations’ debts. While a sole proprietor is liable for all of the business’ liabilities, corporations and limited liability companies’ owners have limited liabilities that are restricted to their share contributions. Another difference between the forms of business organizations is the legal requirements to which they are subjected. While a sole proprietorship only requires the filing of the enterprise’s name, corporation, and limited liability companies must be registered.
The organizations’ tax liabilities are also treated differently. While a sole proprietorship is taxed as a natural person through the proprietor’s income, a limited liability company is taxed at the business organization’s level while a corporation’s taxation involves a double taxation in which the organization’s earnings are taxed and shareholders are taxed on their dividends.
The organizations also differ in their structural requirements.
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(Forms of Business Organizations Essay Example | Topics and Well Written Essays - 500 Words - 2)
“Forms of Business Organizations Essay Example | Topics and Well Written Essays - 500 Words - 2”, n.d. https://studentshare.org/macro-microeconomics/1610926-writer-choice.
The discussion also probes why the masses were prone to Khomeini’s fundamentalist appeal. This paper explores the typology, causes, and evolutionary pattern of Iranian revolution as demonstrated by consciousness of the masses and exploitation of mechanisms of communal solidarity.
Accounting Introduction Starting a small business requires a person to have an understanding of various business forms. This is fundamental because the person starting a business can measure the pros and cons of each as it relates to the business idea. This paper intends to relate various business forms and determine which suits the chosen small business idea.
Unlike most of business organizations, sole proprietorships are not considered separate entities legally. In fact sole proprietorship forms one of the most common business organizations in our society. Characteristics Liability: Sole proprietorships do not enjoy limited liability.
Where there is no written partnership agreement, the state partnership laws provide that partners shall share the profits and losses of the business equally and none of the partners may withdraw their capital input in the partnership outside the agreement of the other partners unless the partnership is brought to an end.
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One of the single most important decisions that any business operation needs to make is with regards to what specific level of organization you will seek to engage with. Although it may seem as something of a trivial decision, the fact of the matter is that regardless of how profitable a given entity might be.
Since the business and the owner are regarded as one, the business income is the owner’s income and the owner shares the losses. It is also apparent that the business income is not taxed separately like other forms of business such as corporation. Sole proprietors enjoy complete control of their businesses and are entitled to make any decision concerning their businesses.
Information role entails: the monitor role through collecting information from subordinates and from the environment, the dissemination role in which he shares information to subordinates, and the spokesman role in which the manager communicates information to influential people in his organization.
The author states that any act or omission of any of the partners in a partnership, committed during the course of its business that causes loss to a third party should be borne by all the partners to the extent of their participation. The liability of partners in a general partnership under the foregoing situations is characterized as joint partnership.
A sole proprietorship is a business form that is owned by an individual or a family with the sole aim of earning the profits. The advantages of a sole proprietorship include the ability by the owner to make faster decisions, having the right to all the returns of the business and the ease information.