Types of Business Organizations and Strategies for Business Expansion

Individual report

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
Types of business organisations..................................................................................................3
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Business organisation, an entity which is established in order to fulfil the purpose of
carrying on commercial business. These type of organisation is basically needs to follow some
rules and regulations to run business smoothly and follow property rights. The present report will
be based on the case study given as Sam operates as a sole trader company name IOM solution
which sells electrical parts to local garages. Sam is running this business since eight years as the
time passes the business has grown in terms of staff members and demand also. Now Sam is
thinking to expand this business. The study will provide detailed information about types of
business organisation available in terms of reorganising the company. Furthermore, it will also
highlight some legal consequences for each option which is available.
Types of business organisations
As we all know that business organisation is the most essential choice one can make in order
to run their business (Allen, Kraakman and Khanna, 2021). When the person decides what form
will be suitable for business transactions that will affect a various types of factors. From those
factors company can see that whether business will be able to survive in the future or not. It is
essential for Sam to see the option available as he wants to expand business. Before proceeding
with any kind of business ownership and making of decisions related to business, it is advisable
to see factors such as nature of operations, political and legal factors and these factors have to be
taken into consideration.
Sole proprietorship
This is the most simplest and common form of business ownership one could have, as it
is a business owned by only single person and for their own betterment. Here, the person only
has to bear loss and earn profit. the major advantage of using this method is there is no such rules
and regulation for sole proprietorships (Eniola, Iyabo and Peter, 2018). Here all the profit which
the business has earned are subject to that person only. Also, it does not require much paperwork
and do not need to register with the state government. If Sam run business transactions by
following sole proprietorship only then he is the one who can make important decisions. he has
total control over informed decisions, financials and others such as how IOM solutions will
function and work effectively to achieve its goals. The another advantage of using this form of
business is flexibility because there is no interference of government. The major drawback of