Form of Business Enterprise

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
Advantages and Disadvantages of Sole Proprietorship, Partnership, and Corporation
Advantages and Disadvantages of Sole Proprietorship, Partnership, and 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

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