BUSN 370 Regent Business Organizational Forms

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Regent University

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Utilizing the concepts from Chapter 20, write a paper that discusses the four (4) business organizational forms, their advantages/disadvantages, and the extent of potential liability that the owner is exposed to in each organizational form.

Compose the homework assignment in accordance with APA standards and cite a minimum of three (3) scholarly peer reviewed sources (in addition to your textbook and the Bible) as references (word count range 1000-1200 words).

APA style

Liuzzo, A. L., & Hughes, R. C. (2019). Essentials of Business Law (10th ed.). New York, NY: McGraw Hill Education:

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Running head: BUSINESS ORGANIZATIONAL FORMS

Business organizational forms
Student’s Name
Professor’s Name
Course Title
Date

BUSINESS ORGANIZATIONAL FORMS

2

Business organizational forms
A business is created by a single individual, two people or more who conduct commercial
enterprises to render services, goods or both in exchange for payment such as money from their
customers; and a business organization provides the legal framework that describes the
business’s structure, liability risk, and the profit dispersal. In other words, a business
organization is a legal set up for one’s business, every state and region has different laws of
business organization registration, therefore one has to determine the relevant requirements to set
up his or her business. To know which form of business organization matches your business, and
then you should select who is liable and the cost, what kind of assets does the company own and
how are these assets shared. Your business organization will ascertain whether the business is
profit- generating or non- profit. In case if it’s for generating profit then your business
organization will explain how these profits will be shared (Fjeldstad et al 2018). The business
organization will climb to the hierarchal structure of the company, for daily operations and to the
extent of legal responsibility.
Among the reasons for indicating a class of business, the organization is to contain risks
since all businesses naturally come with risks which can be managed within the organizational
structure parameters. As a result, every form of business organization places advantages and
disadvantages depending on the business set up and the industry. There are several forms of
business organizations which are majorly split into two major classes; limited liability and
unlimited liability. It is therefore important to be aware that liability as a business organizational
term refers to risks (Liuzzo et al 2019). For unlimited liability, the proprietors of the business
bear the burden of penalties, debts and any other kind of loss related to their collapse. For a
limited liability organization, there is an extent to how much the company proprietors can be
held responsible for legal costs and damages.
Forms of business organizations
Limited liability organizations;
1. Sole proprietorship
A sole proprietor refers to the sole owner of the business who is accountable for all the
assets, liabilities, profits and losses. Most sole proprietorships have different operating names but
it is not needed because taxes are paid via the owner’s social security number. Whenever
someone explains themselves as self-employed then they operate as a sole proprietorship. It
needs less paperwork to create a sole proprietorship and in some places...


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