Business, Duties, and Ethics: Business Organization Formations

Business, Duties, and Ethics
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Business, Duties and Ethics
Business Organization Formations
The phrase business formation or otherwise the business structure is used to define an organization's accepted legal structure within a specific jurisdiction that allows it to engage in certain business activities. The organization's responsibility of raising capital and taking on financial obligations for the business, the amount of taxes the business must pay to taxing authorities, and separating assets from liabilities, among other daily operations, are solely determined by the business formation. The major business formations available in most jurisdictions and acceptable in the global environment include sole proprietorship, partnership, limited liability company (LLC), and corporation (Mancuso, 2020). The different kinds of business structures have their strengths and weaknesses, making each suitable in some circumstances while also limiting their applicability in other circumstances.
In a sole proprietorship, the business owner is liable for all the business undertakings, including funding and tax obligations (Robison, 2021). The individual assets are not separate from the company’s assets, thus having unlimited liability. The benefit of having a sole proprietorship is attributed to its simplicity and efficiency in management because the owner is the sole decision-maker. Partnership business formation brings together two or more people to form an entity and is the closest business structure to a sole proprietorship. The liability to the company is split between the partners, putting the individuals' assets at risk of being treated as liabilities to the company. Similarly, a partnership has a fairly simple structure, and the financing is done by the listed partners in specified proportions.
An LLC and a corporation are the two business formations that draw out some sort of complexity and limited liabilities to the owners. A corporation is a business formation that separates the owners and management from the ownership of the company, allowing the company to function legally as an independent entity. The owners have limited liability to the company, and the ownership is only based on shares (Davis, 2018). This formation offers numerous options for raising capital, and the requirement to pay corporate tax remains the unique characteristic. On the other hand, an LLC brings together the characteristics of a corporation and a partnership, making it one of the most ideal business formations of contemporary times. An LLC has the option to operate like a corporation while tax and other legal and financial obligations are treated as is the case with a partnership, thus having more flexibility (Suzuki & Vinocur, 2018). An operating agreement is required for a properly created LLC to outline its guiding principles.
Business Formation and Accounting Firm
Accounting firms offer clients a wide range of functions: bookkeeping, payroll processing, and even payment information for goods and services. They help corporations and companies maintain their legal and financial obligation while forging healthy financial documents. Accoun...