BUSINESS ORGANIZATION

1 BO is profit-seeking enterprise¹that serves as the main link between scarce resources and consumer satisfaction.

2. the main purpose of BO is to satisfy people’s wants

3. There are three major kinds of business organizations: the sole proprietorship², the partnership³and the corporation

4. . sole proprietorship is a business owned and run by one person, Sole proprietors own all the profits of their enterprises and are free to make whatever changes they please

5. The main advantage of a sole proprietorship is that it is the easiest form of business to start and run

6. The major disadvantage of a sole proprietorship is the unlimited liability⁸that each proprietor faces, it has limited financial resources

7. the unlimited liability is liability for⁹all financial losses or debts that the business may incur

8. A partnership is a business that is jointly owned by two or more people who have combined their talents and resources for the purpose of earning a profit

9. there are such forms of partnership as general partnership and limited partnership.

10. In the GP partners share profits and looses, responsible for the management of the business and in the LP partners are only liable for the amount they have invested in the business and usually not involved in the management of the firm.

.11. they are easy to form and often get tax benefits⁵from the government.

12. The major disadvantage is unlimited financial liability, that partners may disagree with each other causing management conflicts.

13. A business corporation is an institution established for the purpose of making profit.

14.it is necessary to get file for permission, charter to form a corporation.

15.It is operated by individuals

16.the main advantages of corporation ownership are the ability to acquire greater financial resources, it attracts a large amount of capital, it has great capacity for growth and expansion

17.the main disadvantages of corporation ownership are is difficult and expensive to organization, an extra tax on corporate profits.

Date: 2014-12-21; view: 1031