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Forms Of Business Organizations Essay Example

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Forms Of Business Organizations

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Forms Of Business Organizations. Corporations also have the advantage of perpetual existence as the death of the stockholder will not result in the termination of the business. Other advantages include the enhanced credibility, ease of raising additional capital through issuing new shares or obtaining a loan and tax benefits of having deductible tax expenses. The disadvantages of corporations include the need to comply with more legal formalities like filing of annual returns, obligation to comply with more federal rules and regulations and the fact that it is expensive to form and operate compared with other business forms e.g. sole proprietorship and partnerships. Analyzing the advantages and disadvantages of corporations in light of the farming business of the four brothers, this form of business will not ensure be advisable as it will not meet the preferences of the owners.

First, having a corporation will not give them the powers to determine the ownership and limit it to the members of the family. It will also not guarantee the adherence to the Christian beliefs and norms. Besides, having a C corporation will deny them the ability to determine the management of the business hence Xavier may not have the opportunity to offer his experience and skills. A C corporation demands that a board is constituted and the board will have the mandate of monitoring the operation by formulating policies and determining who to manage the business. In conclusion, the form of business determines the manner in which the business will be operated and managed apart from determining the amount of taxes to be paid and other reporting requirements, It is therefore important that before a decision is made, the owners of the business should carefully analyze the merits and demerits of each business form in order to make decisions that will ensure their demands are met. Alex, Bill, Carl, and Devon together with Xavier should thus select Limited Liability Company as it is the form of business that will ensure their interests and expectations are met and the business managed according to Christian values and God’s wish without engaging in unlawful operations. Forms Of Business Organizations.

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