Business Organization Overview

Business Organization

• A business is an entity that combines resources (like materials and services) to make goods or services for consumers.
• Operations include buying, assembling, distributing, advertising, selling, and accounting.
• A business aims to earn profit (difference between revenue and expenses), promote common good, and protect individual rights.

Types of Businesses

• Service Businesses: Provide services, not products (e.g., computer repair, tutoring).
• Merchandising Businesses: Sell products bought from others (e.g., grocery stores).
• Manufacturing Businesses: Create products from raw materials (e.g., shoe factories, bakeries).

Forms of Business Organization

Sole Proprietorship

• Owned by one person.
• Owner has complete control and authority.
• Owner is personally liable for business debts.
• Simple and inexpensive to set up.
• Suitable for small businesses.
• Advantages: Easy formation, low start-up costs, fewer regulations, no corporate income tax.
• Disadvantages: Unlimited liability, limited life, difficult to raise capital.

Partnership

• Owned by two or more individuals.
• Partners combine resources and share profits.
• Can be General or Limited Partnership
• General Partnership: All partners share in responsibility for debts.
• Limited Partnership: Some partners have limited liability for debts.
• Advantages: Synergy, ease of formation, fewer regulations, stronger access to capital, no corporate income tax.,
• Disadvantages: Unlimited liability (General), limited life, potential for disputes.

This quiz covers the fundamental concepts of business organization including definitions, types of businesses, and forms of business structure such as sole proprietorship. Understand key operations and the general aims of businesses in today's economy.