Business Organization

Topics: Stock, Legal entities, Corporation Pages: 2 (386 words) Published: January 1, 2015
There are four different forms of a business organization. They are a joint-stock company, limited liability company, partnership, and sole proprietorship. These forms of a business organization were started to help business owners with valuable support to make them profitable and successful.

The first form of a business organization is a joint-stock company. Joint-stock companies are comprised of entrepreneurs that will raise the company’s wealth by selling stock shares to investors. There are investors that like to invest their money into numerous companies. They do this to avoid losing all of the money they have invested, especially if any of the company’s stock drops. When a joint-stock company fails because the economy is bad, due to bad management or fraud, the investor’s wealth would be in jeopardy. The investors would be liable for any debt the company had and can be sued by people who are owed the money. An example of a company that is a joint-stock company is Microsoft.

The second form of a business organization is a limited liability company. A limited liability company stops creditors from suing the stockholders personally for the money owed, if a company closes or files bankruptcy. The creditors can only try to get money that is invested in the company by the stockholders. A limited liability company is one of the most popular forms of a business. There is no minimum or maximum number of members in a limited liability company. There are only few businesses can be a limited liability company. Businesses that will not be a limited liability company is banks and insurance companies.

The third form of a business organization is a partnership. A business that has two or more people who contribute to the business and help run it is a partnership. Professionals who have a lot of knowledge will pull their resources to start a company. This will make them the only owners and stockholders. A percentage of stock in the business, depending on how much...
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