Organizational Forms Essay

There argon some(prenominal) types of organizational mixtures that a melodic line open fire strike from. Each form presents pros and cons that whitethorn or may non be suitable for a feature take. This report entrust review characteristics such as indebtedness, in become taskes, longevity or persistency, envision, hit retention, location, convenience and kernel for each melodic phrase form and how they distinguishableiate from the divergent types of organization forms.Sole proprietaryA doctor proprietorship is the most common business form. A business is a sole proprietorship if it is not incorporated, meaning that a separate good entity is not created for it. An proceeds of forming a sole proprietorship is that it is the easiest and to the lowest degree expensive business form. a. indebtedness A sole proprietorship does not excuse the possessor from individualized liability. If the business fails, the proprietor is responsible to the creditors and may lose p ersonal assets. b.Income Taxes The fakes and losings of the business go with the owners personal evaluate re farm. This muckle positively or negatively affect the owner depending on what the profit and losses of the business be and what separate sources of income the owner may learn. c.Longevity or continuity If the owner dies the gild stick outnot continue on.If the owner decides to leave the companionship, then the comp both will to a fault cease to exist. d.Control In a sole proprietorship the owner has full control of the business. e.Profit retention The owner receives e re every last(predicate)y last(predicate) shekels in a sole proprietorship. f.Location When a business is a sole proprietorship the owner cigargontte rifle the business to tout ensemble location. The only fee may be if changing distinguishs or county and the business is operate under a trade name, then the owner will perplex to pay the relatively minuscule fee to operate as a DBA (Doing pr oblem As). g.Convenience or burden There atomic number 18 not every extra burdens when operating as a sole proprietorship. The owner does not have to meet each peculiar(prenominal) reporting or regulatory requirements. There argon not any special tax requirements or restrictions. The business profit and losses are excited with the owners even tax return.General companionshipA frequent collaborationistship is between two or much owners of a business that is not incorporated. a.Liability Each cooperator is held personally reasonable for the debts of the business regard slight of fault. b.Income Taxes Taxes are reported on each checkmates personal income tax return, so any profits made by the lodge are treated separately from the individuals income, moreover included. c.Longevity or continuity of the organization A general alliance lacks continuity. If a partner leaves and his or her shares discountnot be bought by the be partner, then the business essential(prenomin al) close. If a partner dies, their heir can be paid for the foster of their share of partnership, but cannot continue with business.d.Control In a partnership control is have-to doe with between all the partners. This can be difficult when a corporation has many partners or partners that dont sack out each other. If a change is made without consulting with the other partners that can cause friction between the partners, so it may be best to include all partners in all decisions. e.Profit holding Profit is distributed every bit between all partners and so is any loss. f.Location A general partnership is fairly easy to frame-up and move. There are not any special forms that need to be filed with the state or county to form a general partnership. There only has to be at least two people to make up the partnership. g.Convenience or burden Since in that location are not any special files that need to be done for a general partnership, it is very convenient. restrict PartnershipA peculiar(a) partnership is partnership that does not hold the partners personally liable for the business debts. a.Liability express mail partners are not held personally liable for the business debts. b.Income Taxes All profits and losses are passed by dint of each partners individual income tax return. The participation does not pay taxes. c.Longevity or perseveration particular(a) partners can freely enter and leave the political party. The participation can continue if a circumscribed partner leaves. d.Control In a limited partnership there are limited partners and general partners.The general partners deliver the goods the partnership. e.Profit Retention Profits are distributed to the partners based on their contribution and pass through and through to the partners, who in turn report the profits on their individual tax return and pay taxes at their individual rate. f.Location When a LLP is formed or if it moves, then it mustiness succeed with state filing requiremen ts. A LLP must file a Certificate of Limited Partnership with the distinguish state agency. g.Convenience or burden A LLP can be convenient because it attract capital easily, it offers limited liability to partners, easy transferability of partnership, and pass-through taxation.C-corporationA C- corporation or a privately held corporation is a alliance whose origination is not publicly traded. a.Liability A business owner is not personally liable for the friendship debts and is protected from lawsuits and judgments against the business. b.Income Taxes C-corporations are double taxed. The IRS taxes the company profits and tax any dividends paid to shareholders. c.Longevity or Continuity Even if the owner leaves or dies, the C-corporation being a separate entity can continue to go on. d.Control perplexity is shared between the shareholders.e.Profit Retention Profits are usually kept within the company and not distributed to shareholders. f.Location A C-corporation must follow sta te filing requirements in each state that it wishes to setup in. This can be very dearly-won. g.Convenience or burden An advantage of a C-Corporation is that it provides the best protection for the owner against the company debts. A disadvantage is that it can be costly to establish.S-corporationS-corporations are a separate entity from the owner. It offers the owner limited liability, but the tax structure hit of a partnership. a.Liability The owner an S-corporation is not held personally liable for any debts or judgments incurred by the company. b.Income Taxes In an S-corporation, the profits and losses of the company are passed through to the owners and shareholders and reported on their personal income tax returns and taxed at their individual rates. The company itself is not taxed.c.Longevity or continuity Like a C-corporation an S-corporation can continue on, if the owner leaves or dies. d.Control A board of directors manages the company through officers. e.Profit Retention broadly in an S-corporation the profits are passed on to the shareholders. f.Location An S-corporation must follow state filing requirements in any state that it wishes to setup in. g.Convenience or burden An S-corporation can be convenient, because it provides the owner and shareholders protection from company debt and they barely on paying taxes on profit, but it can be costly in setting up. Limited Liability CompanyA Limited Liability Company is similar to an S-corporation in that it offers the limited liability of a corporation, but the tax structure benefit of a partnership. a.Liability owners and shareholders are protected from personal liability for the business debts and judgments. b.Income Taxes Profits and losses are passed through to the shareholders and filed on their individual income tax returns. c.Longevity and continuity An LLC can continue if a member leaves, but the LLC must pay the member the tax of their interest. d.Control An LLC is managed by its members.e. Profit Retention Profits are passed on to the members. f.Location A LLC must follow state filing requirements for any state it wishes to setup in. g.Convenience or burden LLC offer a very flexible structure. It also has no limitations on the number and kind of owners. It can be very expensive to form and because it is so new, it can be more complex.BibliographyBookBeatty, J. & Samuelson, S. (2007). Business Law and the ratified Environment Standard Edition, 4e. Mason, OH Rob Dewey Web localisePerez, W. (2009). Protect Your Business Profits by Incorporating. About.com. Retrieved present 20, 2009, from http//taxes.about.com/od/taxplanning/a/incorporating.htm Corey Pierce, J. (2002-2004). Business Startup Where to aim & How to Grow. Businessfinance.com. Retrieved March 22, 2009, from http//www.businessfinance.com/books/StartABusiness/StartABusinessWorkbookTOC.htmPART Binteroffice memorandarandumtoOwnersubject Business organizationdate8/10/2013There are many different types of busin ess forms. After reviewing them all, I have come to the conclusion that an S corporation will be the most beneficial to you company. An S-corporation is a separate legal entity and protects the owner and shareholders from personal liability and offers benefits with its tax structure. This memo will address issues that are important to you and the advantages provided to you by forming an S-corporation. You expressed concern regarding your personal liability and whether or not if the company was to be sued- you did not require to possibly lose all of your personal assets. With an S-corporation you are protected from losing your personal assets if a company is sued for scorn by an employee or subcontractor.If the company were to default on debts, your personal assets are protected from creditors. Funding will also be fairly easy to harbour with an S-corporation. With an S-corporation, you will be able to sell rakehell in the company to increase capital assets to stand by with you expanding. You will be able to sell as much or as little of your companies livestock as you wish, once a stock value is determined. An advantage to selling you companys stock beside the increase in capital is that you are also able to retain control of the company when yield stock.The profit that your company earns will be distributed to the shareholders, but with an S-corporation, shareholders are only allocated the profit and losses equal to the amount of their investment. The profits and losses are passed through to each shareholder and filed on their individual income tax returns. The company itself is not taxed. Also, with an S-corporation, if you were to pass away, the company would have continuity. The company would not have to dissolve and you. The stock that you own in the company can be transferred to an heir or transferred by the sale of all or a portion of the stock. Based on these findings, I recommend you to form an S-corporation for your company.