Business Organization

Topics: Corporation, Legal entities, Types of companies Pages: 4 (623 words) Published: October 6, 2013
Vanessa Lefler
Bus 210
Week 2 Checkpoint

A friend of mine and I are going to try and open a business doing accounting and bookkeeping but are having a hard time choosing if the form of business organization we will operate as will be joint stock, limited liability, partnership, or a sole proprietorship. A joint-stock company is where business owners raise capital by issuing stock certificates of its ownership. This means selling stock to investors that guarantee them a certain percentage of the company’s profit. This form looks good from the outside but if we were to select this form of organization and our business fails, then any people the business owed money to I(i.e. vendors) would be able to go after the stock holders personal wealth in order to recover the debt. A limited liability company seems like a wiser choice that joint-stock. With this option if our company were to fail the people who the business owed could only go after the money the stockholders original invested. Another thing making this type of company attractive is that my friend and I could open under limited liability as the only stockholder and owners and we would only be risking anything we invested not our entire personal estates. The last two options aren’t very appealing. A sole proprietorship would apply to us because there is more than one of us. Also these types of companies only exist as far as their success goes. A partnership, where two are more people pool their talent and capital and establish a company where they are the stockholder and the owner. This type of company can be taken “public” at any time and offers the option of adding more partners later on. Checkpoint Grading Form , Week Two

Content / Development
1.5 points
The following list of requirements for the CheckPoint is colored GREEN for items that are focused, accurate, and covered in a substantive way. The items colored in ORANGE are not well focused on the call of the exercise, lacking in...
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