Types of Business Organisation and Expansion Methods

ARIAL12

TABLE OF CONTENTS
TABLE OF CONTENTS.....................................................................................................2
INTRODUCTION...............................................................................................................1
MAIN BODY.......................................................................................................................1
Types of Business Organisation....................................................................................1
Expansion methods........................................................................................................3
Conclusion.........................................................................................................................4
REFERENCES..................................................................................................................5

INTRODUCTION
Business organisation are the entity which are formed for the purpose of
commencing a commercial enterprise. These type of organisation are predicted by the
basis of law governing contracts and exchange, property rights and integration. There
are various types of business organisations which are illustrated below
MAIN BODY
Types of Business Organisation
Sole Proprietorship:
Sole proprietorship is also known as individual entrepreneurship which concerns
with only one person. These type of organisations are managed by only one individual
who carries the operational and functional activities of the business. This business is for
the sole proprietor by and for himself. Sam who is the owner of IOM solutions is a sole
trade who may be called as a sole proprietor. The Sole proprietorship business
organisation is managed and controlled by one person who invests the capital and skills
which makes the person responsible for the results. The main features of sole
proprietorship are single owner, undivided risks as there is only one person managing
the operations and unlimited liability (Nußholz, 2017).
Sam can keep moving forward with his enterprise and can be easily established
lawfully, no legal formalities and documents are required for the establishment of this
type of business organisation.
Partnership Firm:
This type of business organisation is built with the combination of two or more
persons for carrying out the business. In this type of business organisation all the
persons included are called partners who are liable for all the results of the organisation
whether it be positive which means profitable or negative which can be loss. The
partnership firm is the agreement between two or more people to share profits and by
acting on the business or by anyone of them. The main features of a partnership firm
are that it has association of two or more persons, it is a contractual relationship
between the partners, it is lawfully existed and shares profit and loses amongst all the
partners (Boyce and Ville, 2017).
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