Week 2 Check Point Business Organization

Business Organization

David Frost

BUS210/Foundations of Business

Keith Fontano

March 6, 2014

Business Organization

There four primary types of business organization; joint-stock company, limited liability company, partnership, and sole proprietorship. For each of these business organizations, I will give an example of a business or business scenario that best relates to each business organization.

A business scenario that could be best compared to a joint-stock company would be that of a company that has multiple investor with different amounts of money invested into the company. A law firm that has multiple lawyers and other sole investor who have invested their own money into the law firm can best depict the business scenario related to joint-stock company business organization. In this scenario creditors can seek the personal wealth of its investor to settle debt. For a limited liability company business organization; a company that has made itself public such as Microsoft enables many people from all over the world to invest in its stock through the stock market. Since Microsoft is a limited liability company business organization, creditor cannot seek the personal wealth of stockholders to settle the debt of the company if it had any. A partnership business organization is best compared to that of a doctor’s office or law firm that has multiple partners who have all invested different amounts of money into the establishment of the business. In a partnership the investor are the owner and the stockholders of the business and each investor receives a certain percentage of the businesses profit. In a sole proprietorship business organization, a business such as a small “mom and pop” gas station is a business scenario that relates best to this business organization. The business only has one investor or owner who has invested all their own liabilities into the company.

Though some of these business...