Acc 561 Week 2

ACC 561 WEEK 2

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ACC 561 Week 2

Introduction

Determining which form of business organization to operate as is imperative when opening a business. One needs to be knowledgeable of the intentions of the business, who is involved in the formation of the business, and components needed for a business to succeed. The business established gives a good determination of which form of business organization to pursue. In this paper, one will discuss a new small business and the goods or services it provides. Also, one will discuss the different forms of business organizations and which will work for the new business.

Business Organization

“Sole proprietorship is the simplest and most general structure chosen to start a business. It is an unincorporated business owned and run by one individual” (Small Business Administration, 2014, para. 1). One main advantage of sole proprietorship is having one owner, which means one would be entitled to all the profits. Another advantage to a sole proprietorship is that one can make all the business decisions without consulting with anyone. However, one who chooses a sole proprietorship assumes responsibility for debts and liabilities, which can become a burden to some business owners. Moreover, when operating as a sole proprietorship it is hard to raise money as investors and banks are leery to invest financially due to the lack of credibility.

A partnership is “the single business where two or more people share ownership. Each partner contributes to all aspects of the business, including money, property, labor or skill” (Small Business Administration, 2014, para.1).A partnership is much like sole proprietorship except instead of one owner, there are two or more. There are three general partner agreements; limited, general, and joint venture. Partnerships are seen...