In a joint-stock company an entrepreneur raises capital by issuing stock certificates of its ownership. This involves selling shares of the stock to investors that guarantee them the right to a certain percentage of the company’s profits. For example, suppose John holds shares of Mike’s Auto Repair Shop, which is a joint stock company. These shares give John a percentage of the vote on Mike’s management decisions, board elections, etc. The shares also give John unlimited responsibility for Mike’s outstanding unpaid liabilities. In other words, unless John sells his shares of Mike’s Auto Repair Shop, he is liable in whole and in part for principal and interest obligations on bonds or other outstanding loans. Since John holds shares of a joint stock company, he is putting his own assets at risk of being liquidated if Mike were to file for bankruptcy.…
A joint-stock company sells off stock certificates of ownership to investors in order to raise capital. Triad Financial, now known as Santander, was an example of a joint-stock company. Jim Landy, CEO owned 49% of the company and his investors owned with 51% of the company.…
Limited Liability Company (LLC) means that, the investors are only limited liable in case the business, the investors invested in, goes bankrupt. The creditors can only take what each investor has initially invested. The creditors must not take outside an investor’s investment, no personal monies that are not part of the investment.…
Starting any business venture has many challenges. One of the most important decisions to be made to help ensure success is choosing the correct business organization. In order to choose the correct type of organization it is important to understand each type of organization along with the pros and cons for each.…
Taking into consideration the forms of business such as sole proprietorship, partnership, limited liability partnership, Limited Liability Company, S corporation, franchise, and corporate form, the scenarios of each form of business is listed below. In addition, the scenarios will allow each individual to further understand the worth of the individual business forms.…
1. A business organized as a separate legal entity owned by stockholders is a partnership.…
The other business organization is the corporation. The corporation is very much like limited partnerships and does not exist at common law; it is a form of business organization that owes its existence to statues in all states that provide guidelines for its creation and management. (Rodgers, S. 2010. Section 13.2) However, unlike a partnership, the corporation is a legal entity in the eyes of the law. As an entity, a corporation enjoys most of the privileges and shares in most of the responsibilities of natural persons; it can avail itself of most constitutional protections offered to natural persons and can own property in its own name, but must pay taxes and is subject to civil and some criminal penalties for acts it performs through its agents. (Rodgers, S. 2010. Section 13.2) The Corporation is governed primarily by the statutory guidelines of the state statute that provides for its creation.…
Choosing a form of business for a product or type of service depends on the liability an individual is willing to assume, how much involvement an individual wants in the day-to-day work, and how much control an individual wants over the business. Prior to making a choice, an individual must understand each form of business as well as the risks and rewards for each. There are numerous forms of business, including sole Proprietorship, Partnership, Limited Liability Partnership, Limited Liability Company, Franchise, Corporation, and S-Corporation.…
A company may begin as a sole proprietorship which has the ease of formation and reporting, but has the risk of unlimited liability, lack of continuity and the inability to raise capital. A partnership allows for more than a single participant, but it still has limitations on raise capital and the exposure of unlimited liability, unless a limited partnership. The hybrid Limited Liability corporation allows sole proprietors and partnership the ability to have the ease of formations of the aforementioned types of company, but offer some of the benefits of a corporation without the disclosures and filings. An LLC may usually have two of the characteristics of a corporation such as limited liability and perpetuity. The public corporation is the form of business that…
A business can create large sums of income for an entrepreneur or entrepreneurs. Most future business owners have an idea of what type of service or product to offer. Deciding the type of business organization to become can be a tough decision. Whether the it be a sole proprietorship, partnership, C- Corporation, S- Corporation, or a Limited Liability Corporation, there will be many factors to take into consideration. It is important to be educated or familiar with each business organization along with implications and benefits. The reason why the proper business organization is important is because, as an entrepreneur picking the right business organization for the business he or she wants to pursue could be difference between success and failure.…
There are five different forms of business organizations that I can consider when planning to start a business. They are…
There are three types of business structures, partnership, sole proprietorship and a general corporation. Each structure has its disadvantages and advantages but the key is doing the research to determine which business structure will be suitable for your business venture. Many people may not be interested in running a small business so a sole proprietorship may not be the favorite structure to start with, or maybe when starting a business you may want your company to start small but eventually run as a corporation. Whatever the case may be one must understand the advantages and disadvantages of each structure.…
There are 4 forms of organization that are available for any individuals or partners that want to start a business of their own. The 4 forms of organization are Sole Proprietorship, Partnerships, Corporations and Limited Liability Company. Each of these organizations operate differently with advantages and disadvantages to it.…
The most common form of business organization is called a sole proprietorship. The most common way to organize a business, Entrepreneur.com describes it thusly: The sole proprietorship is a popular business form due to its simplicity, ease of setup, and nominal cost. It is the easiest form of business to setup: again, according to Entrepreneur, a sole proprietor need only register his or her name and secure local licenses, and the sole proprietor is ready for business. As the business is not incorporated, all assets and liabilities relating to this form of…
Social Responsibility and Managerial Ethics Learning objectives: Contrast the classical and socioeconomic views of social responsibility. Discuss the role that stakeholders play in the four stages of social responsibility. Differentiate between social obligation, social responsiveness, and social responsibility. Explain what research studies have shown about the relationship between an organization’s social involvement and its economic performance. Define social screening. Explain what conclusion can be reached regarding social responsibility and economic performance. Describe how organizations can go green. Relate the approaches to being green to the concepts of social obligation, social responsiveness, and social responsibility. Discuss what purposes shared values serve. Describe the relationship of values-based management to ethics. Discuss the factors that affect ethical and unethical behavior. Discuss the six determinants of issue intensity. Tell what codes of ethics are and how their effectiveness can be improved. Describe the important roles managers play in encouraging ethical behavior. Explain why ethical leadership is important. Discuss how managers and organizations can protect employees who raise ethical issues or concerns. Explain what role social entrepreneurs play. Describe social impact management.…