Bus 210

Business Organization

There are many forms of business organizations, such as joint-stock companies, limited liability companies, partnerships, and sole proprietorships. There are so many examples of business scenarios for these four organizations.

First, a business scenario of a joint-stock company would be a banker, who along with other bankers, that invest some money into an entrepreneur’s up-and-coming company.   The banker would then receive stock in that venture.   All the bankers, along with the entrepreneur, would share the company stock, there by making it a “joint-stock” company.

A very known limited-liability company would be Microsoft.   Microsoft began as this type of company that made sure   that the personal wealth of the stockholders was protected in the case of company failure or hardship.   With that, Microsoft was also considered a limited-liability partnership before it opened up to the public trading of company stock.

To specify a partnership, take a law firm for instance.   The law firm has invested partners (who pool together their legal expertise) that own the company and all company stock.   These law firm partners then form a partnership.

Finally, an example of a sole proprietorship would be a family doctor who owns his or her business.   The doctor has invested all professional and personal resources into the business and could potentially lose this investment (including personal wealth) if the business were to fail.   Moreover, the doctor would be required to report all the business’ expenses and profits on a yearly income tax return.