Answer to Question #190374 in Management for Ys Gabin khan

Question

Explain type of business organization.

Answer 1

Answer

A business organization is the single most crucial choice that most business persons make regarding their company. Any form of organization that a business adopts affects a multitude of factors, which determines the organization’s future. There are four main types of business organizations: Sole Proprietorship, partnership, corporation, and limited company.

1.  Sole Proprietorship – it is the most common form of business ownership and is run by someone for their own benefit.
2.  Partnership- it comes in two types, i.e., general and limited partnership. In general partnerships, both owners invest their money, property, and labor in the business, and they are liable for business debts. Further, limited partnerships require a formal agreement between the partners, and they must also file a certificate of partnership with the state.
3.  Corporations- they are business organizations for tax purposes, separate entities, and considered a legal person. Besides, their profits are taxed as the personal income of the company.
4.   Limited Liability Company- Although they are similar to the limited partnership, they provide owners with limited liability while providing some of the income advantages of a partnership.