Form of Business Enterprise

A form of business enterprise refers to the legal structure or classification under which a business operates. The structure determines how the business is owned, managed, taxed, and how it interacts with the law.

Financial management is not restricted to large corporations:

It is necessary in all forms and sizes of businesses.

The three major forms of business organization are:

• Sole proprietorship
• Partnership
• Corporation

These forms differ in a number of factors, of which those most important to financial decision-making are:

• Taxation
• Degree of control
• Owner’s liability
• Ease of transferring ownership
• Ability to raise additional funds
• Longevity of the business