BUSINESS also known as enterprise or firm

Content type

User Generated

Type

Study Guide

Uploaded By

gubeybpxv

Pages

Rating

ACCOUNTING 
The systematic recording, reporting, and analysis of financial transactions of a business. 
The person in charge of accounting is known as an accountant, and this individual is 
typically required to follow a set of rules and regulations, such as the Generally 
Accepted Accounting Principles. Accounting allows a company to analyze the financial 
performance of the business, and look at statistics such as net profit. 
 
A BUSINESS (also known as enterprise or firm) is an organization engaged in 
the trade of goods, services, or both to consumers.
[1]
 Businesses are predominant 
in capitalist economies, where most of them are privately owned and administered to 
earn profit to increase the wealth of their owners. Businesses may also be not-for-
profit or state-owned. A business owned by multiple individuals may be referred to as 
a company, although that term also has a more precise meaning. 
The etymology of "business" relates to the state of being busy either as an individual or 
society as a whole, doing commercially viable and profitable work. The term "business" 
has at least three usages, depending on the scope — the singular usage to mean a 
particular organization; the generalized usage to refer to a particular market sector, 
"the music business" and compound forms such as agribusiness; and the broadest 
meaning, which encompasses all activity by the community of suppliers of goods and 
services. However, the exact definition of business, like much else in thephilosophy of 
business, is a matter of debate and complexity of meanings. 
 
Sole Proprietorship 
This is the simplest and the most widely used structure for business. It is the least regulated 
type of the various business structures. For tax and legal purposes the business is the 
owner. The unlimited liability factor is probably the greatest disadvantage. The liabilities of 
the business are personal to the owner and the business ceases to exist when the owner 
dies. 
Disadvantages 
· all of the personal and business assets of the sole owner are at risk in the sole 
proprietorship 
· a judgment against the sole proprietorship could reach into the personal assets of the sole 
owner 
· liability insurance premiums are vary high. perhaps too costly for the resources of the sole 
owner 
· due to the structure it may be difficult to obtain a loan. if there is insufficient collateral a 
sole proprietor may have to mortgage a loan or place another piece of personal property 
as collateral 
· when the sole owner dies often the business ceases to exist due to the lack of structure in 
this business form 
 
 Advantages 
· sole owner has total control over the operations of this business 

· least regulated form of business

· other than records for tax purposes there are no legal requirements as to how the

business must be operated

· usually one only needs to obtain a license or pay a fee to a local registering authority.

The Limited Partnership

The limited partnership is a hybrid type of business structure. It contains elements of both a

traditional partnership and a corporation. The limited partnership form of business structure

may be used when some interested parties want to invest in a partnership but want only

limited liability and do not wish to exercise any control over the business activities of the

partnership.

The Limited partnership is subject to much more regulation on the state level than either

the sole proprietorship or regular partnership. Each state in the Union has adopted strict

regulations according to the Uniform Limited Partnership Act governing the formation and

operation of the Limited Partnership.

A limited partnership consists of two types of partners; the general partner; one or more

people who actively manage the partnership; and the limited partner; one or more people

who invest in the partnership but take no active role in the management of the partnership.

The general partners are at personal risk for their conduct of the partnership whereas the

limited partner risks only that which he has invested in the partnership.

Disadvantages

· There is always a chance for a lack of continuity and clear cut guidelines amongst the

partners concerning who does what and how to conduct business.

· Due to the state regulations , limited partnerships are subject to more paperwork than the

general partnership.

· General partners maintain full personal risk. The limited partner risks losing the benefits of

the limited partner status if they take any active role in the conduct of the activities of the

partnership.

Advantages

· The limited partner, as long as he remains passive, has no personal liability and risks only

that which he invests.

· This low risk for the limited partner and the fact that the limited partner shares in the

profits and tax deductions with no duties regarding the active conduct of business, may

make it easier for the partnership to find investors.

The Corporation

A corporation is an artificial entity created by filing Articles of Incorporation with the

Secretary of State. This gives the corporation existence and a legal right to conduct

business in the state of incorporation. Corporations are more complex than either a

partnership or sole proprietorship and are subject to more regulation by the state.

The internal rules of the corporation which outline the mechanics of the operation and

management are called the by-laws.

End of Preview - Want to read all 4 pages?

Access Now

Unformatted Attachment Preview

ACCOUNTING The systematic recording, reporting, and analysis of financial transactions of a business. The person in charge of accounting is known as an accountant, and this individual is typically required to follow a set of rules and regulations, such as the Generally Accepted Accounting Principles. Accounting allows a company to analyze the financial performance of the business, and look at statistics such as net profit. A BUSINESS (also known as enterprise or firm) is an organization engaged in the trade of goods, services, or both to consumers.[1] Businesses are predominant in capitalist economies, where most of them are privately owned and administered to earn profit to increase the wealth of their owners. Businesses may also be not-for-profit or state-owned. A business owned by multiple individuals may be referred to as a company, although that term also has a more precise meaning. The etymology of "business" relates to the state of being busy either as an individual or society as a whole, doing commercially viable and profitable work. The term "business" has at least three usages, depending on the scope — the singular usa ...
Purchase document to see full attachment