商务英语(二)new.docVIP

Unit 2 FORMS OF BUSINESS ORGANIZATION In todays business environment, there are three major forms of legal organization: sole proprietorship, partnership, and corporation. Before starting a business, you need to make a number of decisions. One of the decisions you have to make is the form of organization your business will take. Usually, it is recommended that owners consider the following questions before choosing their form of organization: What are the firms goals, and what form contributes most to these goals? How much control of operations does the owner have? What are the costs and procedures of starting a given form of business? How easy will it be to raise more capital? To attract qualified employees? What is the size of the owners liability (esp. financial responsibility) for the debts and taxes of the firm? Would the firm continue if something happened to the owner? What are the effects of the tax and regulatory laws of the form? Sole Proprietorships The most common form of ownership is a sole proprietorship—that is, a business owned by one individual. In many cases, the sole proprietor also works in the firm. Of course, the proprietor always has complete responsibility for all operating decisions. The majority of sole proprietorships are found in agriculture, wholesale and retail trade, and services. The rest are found in manufacturing and other industries. Sole proprietorships have several advantages that foster their widespread use: Ease and Low Cost of Formation The sole proprietorship is the easiest of all businesses to establish. After securing (apply for and get) any licenses and permits if they are required, the owner simply begins operations. It is also the least expensive type of firm to get going. There are no agreements between parties (as there are for partnerships) and no applications for charters (as there are for corporations). Thus both time and money are conserved. All Profits to the Owner The owner of the sole proprietor