Business Organization has ample ways that a Business can be organized and defined Business structure. The main types of Business Organization in the United States are Sole Proprietorship, Partnerships Business, Corporation and Limited Liability Companies.
Business Organization tells us that how a Business is organized will determine how it pays taxes, accounts for profit, non-profit & manages the Liability of Business Organization owners.
Definition Business Organization - The Word "Business Organization" refers to how to Organize your own Business. The Business Organization is explained in the bylaws when the Business is created with the name and contact information of those who own & run the company with their roles defined. The bylaws state the purpose of the Organization and what it does. Sole Proprietorship does not have bylaws because one person owns and controls the whole Business and solve all of Business problems.
Partnership Business
A Partnership Business is an Organization where two or more persons invest or spend their money, talent, labor and effort to build a company, partners work together for their success and for achieve their aims. In Partnership Business all partners personally share in the loss and profit of the company. Taxes are paid by the individuals. Partners are liable in the event of lawsuit. When any partner dies, the Partnership Business ends, in this ways Partnership Business are performing.
Corporation
A Corporation is also a Business Organization that has shareholders & a board of directors that direct how the Organization will be run. The shareholders are the owners. A Corporation will continue to exist even after a shareholder dies but in Partnership Business is opposite. Corporation has it own tax identification file and numbers it own taxes. Owners are taxed on dividends paid on corporate profits and salaries paid by the Corporation. Owners are not held personally liable. Corporation has the ability to raise large amount of profits of capital by becoming a publicly traded security. To do so require board approval with the Corporation meeting specific financial necessities outlined by the Securities Exchange Commission it's all included in Corporation.
A Sole Proprietorship is a Business Organization owned by individual or a single person who controls all aspects of the Business Organization. The Organization uses a flow through tax configuration with the owner's social security number to pay taxes instead of having to pay corporate taxes & individual taxes. The merits of a Sole Proprietorship are they have low start up costs compared to other Business and book keeping is simple. The demerits Sole Proprietorship are that all the Liability falls on the Sole proprietor, including his or her personal assets, in the event of a lawsuit. While these type of Organization is less expensive to start and easy for all, it is more difficult to lift up capital.
Limited Liability Companies
A Limited Liability Companies are mixture of a Partnership Business & a Corporation where owners are called members instead of partners or shareholders. There are ample merits to creating a Limited Liability Organization such as limiting the Liability for legal judgments and debt to the assets of the Organization. Personal assets are protected like a Corporation but taxes are treated like a Partnership Business where the individual members are responsible. The demerits of Limited Liability Companies are that they require more complex economic maintenance and they have a Limited life for the Companies. The Limited Liability Companies ceases when one member dies.
Definition Business Organization - Sole Proprietorship - Partnership Business - Limited Liability Companies
PRIVATE LIMITED COMPANY ADVANTAGES
IMPORTANT ELEMENTS OF EMPLOYMENT
