Business Organazation

Business Organization

Joint-stock company: A company or association consisting of individuals organized to conduct a business for gain and having a joint stock of capital represented by shares owned individually by the members and transferable without the consent of the group.

Limited Liability Company: A corporate structure whereby the members of the company cannot be held personally liable for the company's debts or liabilities.

Partnership: A legal relation existing between two or more persons contractually associated as joint principals in a business.

Sole Proprietorship: A form of business in which one person owns all the assets of the business, in contrast to a partnership or a corporation.

Business Scenario

Starting a computer repair service after finishing college is a dream of mine. First I need to look at the type of company I want it to be. There are different forms I need to look at in order to decide which one is best suited. First, I would consider Sole Proprietorship which means I will own all assets of the company. One thing that attracts me to this form is the flexibility and how simple it will be to form. However, some of the drawbacks include things like unlimited liability and the fact that raising capital could be difficult. Second, I consider a partnership with my friend who is a web page designer. He would like a storefront and if we went into a partnership the responsibility would be split between us. We will also share the risks involved in owning a business. Also the complementary skills and additional contacts of each partner can lead to the achievement of greater financial results together than would be possible apart. Although the pros look very appealing there are also some cons to being in a partnership such as, the profits are shared, not having total control over the business, and the possibility that if something happens and they skip town, I will be liable for everything. Third, forming a limited liability company takes...