25 Jan 2010
Among all existing types of business companies it is possible to identify the four major business organizations. They are: sole proprietor, corporation, partnership and non-profit organizations.
Sole proprietor can be related to as a unincorporated business organization. The major advantage of this business is the fact that its owner is the only legal body that controls it and gets all the profit. Nevertheless, such type of business organization does not have what is known as limitations of liability and therefore experiences difficulties in the fact that the debt of this business becomes the straight the debt of its owner. It does not imply any partners and the owner has
Four major types of business organizations individual responsibility for the activity of such business organization.
A corporation exists and functions separately for the person who is its actual owner. The main advantage is that the person who owns such business is actually protected financially and legally from the people who posses the shared of the company. The profit does not go straight to the owner but is also distributed among the shareholders.
A partnership is an incorporated business which has one general partner. This fact provides the partnership with unlimited liability. The partners have to share all the responsibilities.
Any profit is distributed equally among the two partners. Nevertheless in terms of partnership it is possible to talk about increased personal liability.
Non-profit organizations are business organizations that do not get any type of financial profit. The general aim of such organizations is some civic trend. They often get charity donations and do not have to pay the taxes as have a charitable nature. Nevertheless, such organizations have to present full reports in terms of the use of the financial donations they get.
Works cited:
1. Drucker, Peter. What Business Can Learn from Nonprofits. Harvard Business Review: 1-7, 1989.
2. Blumberg, Phillip I. The Multinational Challenge to Corporation Law: The Search for a New Corporate Personality, 1993.
3. About.com. April 2008/May 2009. Types of Business Organizations Business & Legal Factors to Consider By William Perez. May 8,2009.
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