Forms of Business Organization

1
FORMS OF BUSINESS ORGANIZATION 1
Learning Objectives
An understanding of the material in this chapter should enable the student to
1. Describe the life cycle of a business.
2. Explain how the advisor is a businessperson who shares many common
concerns with business owners.
3. Describe 10 different forms of business organization, and identify the
distinguishing characteristics of each form.
4. Describe the major advantages and disadvantages of each form of business
organization.
This chapter looks at the business owner and the challenges facing the
financial advisor who enters the business insurance market. It asks you to
view yourself as a business owner and realize you have much in common
with the business owners you wish to approach. It looks at the life cycle of
a business and discusses 10 forms of business ownership, examining the
advantages, disadvantages, and tax implications of each form.
THE BUSINESS INSURANCE MARKET
There are over 23 million small businesses in the United States, according
to the U.S. Census Bureau. That means there are 23 million prospects with
business insurance needs. In this book we will examine those needs and
discuss how you can successfully help businesses meet them.
The complex business environment is filled with the pressures of running
a business, such as product or service considerations, profit margins,
government regulations, constant decision-making, worry about the future,
changing market conditions, and countless other things. Each type of
business also has its own unique challenges. A dry cleaning firm is different
from a car dealership; an architecture firm is different from a physician’s
practice, a manufacturing plant is different from a consulting firm.
1.1
1.2 Essentials of Business Insurance
This book focuses on what a financial advisor (see Special Notes to Advisors
page for an explanation of the terms financial advisor and advisor as used
in this book) needs to know to work with... [continues]

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