Types of Business Organizations for Expanding Operations

Business
Organizations

Table of contents:
Introduction:..............................................................................................................3
Types of business organizations potentially available to expand operations:.......3
Suggesting the best type of business organization to Sam:...................................8
Conclusion:................................................................................................................8
References:................................................................................................................9

Introduction:
This report focuses on various types of organizations which one can choose
to start and expand their business. As per the case study, Sam is a sole trader
selling electrical parts to the local garages. Over the span of years, Sam has grown
up business successfully and now wants to expand operations. This report
discusses what all options are available with Sam to expand business operations
and which will be the most suitable one. Every business chooses its ideal type by
taking into consideration internal and external factors such as legal aspects, capital
requirement, control of operations, complexities of formation and so on.
Additionally, this report suggests ideal form of organization to Sam after
considering all pros and cons of each and every type of business. Moreover, this
report explains legal consequences of every type of business in order to make best
decisions for long term purposes.
Types of business organizations potentially available to expand
operations:
As per this, business can be of different types which entirely depend upon
internal and external factors of organization. These include financial requirement,
legal requirements, ownership, control and many more. Thus, all these factors help
members in wisely making decision regarding which option will be best to go for.
Sole proprietor business: It is a type of business in which complete ownership
and control is in the hands of single owner. It is easy to form and handled by an
individual only. Here, the business organization and the owner are single entity. It
is one of the simplest forms of business organization due to which it has no legal or
registration formalities. It is suitable for all small and medium term businesses.
Therefore, an entire profit goes to the owner only due to entire operations are
handled by single owner. As in relation to this, Sam is doing business as a single
owner and managing entire operations by self. As with the growth of business it’s
expanded by using other types of organization. (Bailey and et.al., 2018)
Legal consequences of sole proprietorship:
1. Formation and closure: There is no separate law which governs sole
proprietor business. There are no legal formalities to establish operations