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Organization-1
factors to consider in
selecting the best organizational form
for a
particular business
activity include:
The cost of creating the organization
The
continuity
or
stability of the
organization
The control of decisions
The personal liability of the owners
The taxation of the organizations earning
Sole Proprietorship
The most natural and simplest form of
business.
Single person runs the business the way he
likes, with:
low operational costs,
without interference from others.
accountability
leading to high level of credibility:
(i) protection of personal assets
(j) transferability of ownership/shares
(k) agency relationship, relation between company
and
single members would be that of principal and
agent
(l) better access to capital markets
(m) easy to raise funds, and
(n) Receive tax advantages on certain payments,
such as insurance, lease rentals and other expenses
being
tax-deductible.
Partnerships
Whenever two or more people wish to start a
Corporations
A corporation is an artificial, intangible
Limited Partnerships
A Limited Partnership is basically all the attributes
Company Limited by
Guarantee
Means a company having the liability of its
members limited by memorandum to such
amount as the members may respectively
undertake to contribute to the share capital
of the company in the event to its winding
up.
The company limited by guarantee is usually
formed on a 'no profit basis'.
Guarantee limited companies must use the
words "(Guarantee) Limited" as the last
words of their name .
Agency Principles
The Agency Principles are used to
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