SYEDA MUSTAJAB ZAHRA

Accounting

Topic:-

Forms of Business Partnership Advantage & Disadvantage of Corporation

Forms of Business:

There are three main forms of Business Organization:

Sole Proprietorship Partnership Corporation

Single Proprietorship:

Business owned by one person

Owner has relatively unlimited control over the business & enjoy all the profit

Unlimited personal responsibility for losses .

Its unlimited liabilities.

Partnership:

Association of two or more persons as owner to carry

on a business for profit Based upon voluntary

agreement of partners Profits & losses shared

equally unless otherwise agreed

It’s a unlimited liabilities.

Corporation:

A Joint Stock Company is founded under the companies Ordinance, 1984 .

Owned by many people. Many Person who have

made investment in the Company are known as shareholders.

It’s a limited liability .

Partnership A/c:

According to Partnership act 1932,

Dissolution of partnership its reconstitution &

reorganization which continues under the old name & style .

Its a voluntary association of person to carry on business

There are many modes of firm :

Dissolution of agreement Compulsory Dissolution Dissolution by Court Dissolution by notice of

partner at will. Dissolution on happen of

certain contingencies.

Modes of Dissolution Firm

Advantage of Corporation:

Corporation has certain advantage not open to other forms of organization:

Limited liability Funding sours Transfer of ownership Separation of ownership &

management Expansion & Contraction

Advantage of Corporation:

Capital can be raised through sale of stock

Enjoy status & deference in business circles

Binding contracts do not need individual owner signature.

Disadvantage of corporation:

Disadvantages of a corporation form of ownership:

Taxation Federal & State Control Charter restrictions Cost more to create More complex to organize

Disadvantage of Corporation:

Subject to more governmental regulation

Stockholders do not receive benefit of losses

Ownership control passes to the board of directors

Thank you