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Permanent Link: http://ufdc.ufl.edu/IR00002523/00001
 Material Information
Title: Business Organization
Physical Description: Fact sheet
Creator: Israel, Glenn D.
Publisher: University of Florida Cooperative Extension Service, Institute of Food and Agriculture Sciences, EDIS
Place of Publication: Gainesville, Fla.
Publication Date: 1991
 Notes
Acquisition: Collected for University of Florida's Institutional Repository by the UFIR Self-Submittal tool. Submitted by Melanie Mercer.
Publication Status: Published
General Note: "Publication date: November 1991."
General Note: "HE 7108"
 Record Information
Source Institution: University of Florida Institutional Repository
Holding Location: University of Florida
Rights Management: All rights reserved by the submitter.
System ID: IR00002523:00001


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FactSheetHE7108 TheInstituteofFoodandAgriculturalSciencesisanequalopportunity/affirmativeactionemployerauthorizedtoprovideresearch,educational informationandotherservicesonlytoindividualsandinstitutionsthatfunctionwithoutregardtorace,color,sex,age,handicap,ornational origin.Forinformationonobtainingotherextensionpublications,contactyourcountyCooperativeExtensionServiceoffice. FloridaCooperativeExtensionService/InstituteofFoodandAgriculturalSciences/UniversityofFlorida/JohnT.Woeste,DeanBusinessOrganization1 GlennD.IsraelandNaydaI.Torres2Oneofthemostbasicdecisionsconcerningthe operationofahomebusinessisthetypeoflegal organizationitwillbe.Youmaychoosefromasole proprietorship,partnership,orcorporation.Each typehasitsownadvantagesanddisadvantages.SOLEPROPRIETORSHIPThesoleproprietorshipisthemostcommonform ofbusinessownershipintheUnitedStates.Asole proprietorshipisownedbyoneindividual.Thisform ofbusinesshasdistinctadvantagesanddisadvantages ascomparedtoothertypesofbusinesses.Advantages Simplestructure Lowstartupcosts Greatestfreedomfromregulation Ownerindirectcontrol Minimalworkingcapitalrequirements Taxadvantagetosmallowner AllprofitstoownerDisadvantages Totalpersonalliability Riskbusinessterminationwithdeathordisability Difficulttoraisecapital Profitstaxedaspersonalincome PersonalaffairseasilymixedwithbusinessPARTNERSHIPApartnershipiscomprisedoftwoormore persons.Thepartnershipcanbeestablishedinmany formsorfunctions,asdeterminedbythepartners.A partnershipcanbeformedonthebasisofanoral agreement.Itisrecommendedthatpartners(with thehelpoflegalcounsel)prepareawrittendocument whichstateswhateachpartnerwillcontribute,areas ofauthority,andhowprofitsorloseswillbeshared. Partnershipscanhavetwotypesofpartners.All partnershipshaveatleastone``generalpartner''who hasauthorityandresponsibilityfortheday-to-day operationofthebusiness.Generalpartnersalsohave unlimitedpersonalliability(likesoleproprietors). Somepartnershipsalsohavelimitedpartners. Limitedpartnersareinvestorswhodonotshare responsibilityor 1.ThisdocumentisFactSheetHE7108,aseriesoftheHomeEconomicsDepartment,FloridaCooperativeExtensionService,InstituteofFood andAgriculturalSciences,UniversityofFlorida.Publicationdate:November1991. 2.GlennD.Israel,AssociateProfessorandProgramandEvaluationSpecialist,andNaydaI.Torres,AssociateProfessorandFamilyand ConsumerEconomicsSpecialist,CooperativeExtensionService,InstituteofFoodandAgriculturalSciences,UniversityofFlorida,Gainesville FL32611.

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BusinessOrganization Page2authorityformanagingthebusiness.Theyareliable onlyfortheamountoftheirinvestment.For example,ifyouarealimitedpartnerinyourbusiness andhaveinvested$500,yourliabilityislimitedtothat amount.Advantages SimpleOrganization Easeofformation Lowstartupcosts Sharedfinancialresources Sharedpersonalresources Broadermanagementresources LimitedoutsideregulationsDisadvantages Unlimitedliability Limitedlifeofbusiness Dividedauthority Difficulttoraiseadditionalcapital Hardtofindsuitablepartnersortogetridofa badpartner Costoforganization SharingofprofitsCORPORATIONCorporationsareaformofbusinesswhichis ownedbypeoplewhoarecalled``stockholders.'' Corporationsmustobtainacharterfromoneofthe states.Whenabusinessbecomesincorporated,the businessbecomes,inalegalsense,a``person''which canbuyproperty,enterintocontracts,sueorbesued, andconductday-to-daybusiness.Ifyouplanto incorporateyourbusiness,youshouldretainalawyer foradviceandtopreparethenecessarydocuments.Advantages Limitedpersonalliability Specializedmanagement Sharedpersonalresources Ownershipistransferable Changeinownershipneednotaffectmanagement Legalentity Possibletaxadvantages EasiertoraisecapitalDisadvantages Morecomplicatedmanagement Mostexpensiveformtoorganize Morecomplicatedmanagement Charterrestrictions Extensiverecordkeepingnecessary Possibledoubletaxation MoregovernmentcontrolREGISTRATIONOFYOURBUSINESSThelegalrequirementsareminimalforasole proprietorship.AsofJanuary,1,1991,youmust registeryourbusinesswiththeDivisionof Corporations,FloridaDepartmentofState,ifyou plantouseafictitiousnameforyourbusiness. Fictitiousnameregistrationisrequiredifyouuseany nameotherthanyourlegalpersonalname(first, middleinitial,andlastname),orregisteredcorporate name,trademarkofservicemark.Forexample,a businessnamed Carol'sCustomDraperies or Ted's TravelServices mustberegistered. Toregisterafictitiousname,youmustadvertise yourintentiontoregisterthenameonceina newspaperinthecountywhereyourbusinessis located.Thenfill

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BusinessOrganization Page3outtheregistrationformandpaythefilingfee.The formsforregisteringafictitiousnamecanbeobtained fromtheFloridaDepartmentofState,Divisionof Corporations,P.O.Box1300,Tallahassee,FL323021300(904-487-6058)orfromtheClerkoftheCircuit Courtinyourcounty. Partnershipswhichhaveonlygeneralpartners alsomustregistertheirbusinessusingthefictitious nameregistrationprocedureandforms.Limited partnershipsmustfileacertificateoflimited partnershipandpaythefilingfee.Theformsfor registeringalimitedpartnershipcanbeobtainedfrom theFloridaDepartmentofState,Divisionof Corporations,P.O.Box6327,Tallahassee,FL32314 (904-487-6050). Corporationsmustprepareandexecutearticlesof incorporationincompliancewiththe``Florida GeneralCorporationAct.''Inaddition,thepapers mustbe deliveredtotheDivisionofCorporations,alongwith therequiredfeesandtaxes.Theformscanbe obtainedfromtheFloridaDepartmentofState, DivisionofCorporations,P.O.Box6327, Tallahassee,FL32314(904-488-9000).SOURCESDixon,MaryLou. BusinessOrganization.Circular 811-5.CooperativeExtensionService,University ofGeorgia.January,1990. Duffy,Margaret. TurnTalentIntoDollarsThrough Home-BasedBusiness.PublicationSP153. CooperativeExtensionService,Universityof Massachusetts. FloridaDepartmentofCommerce. FloridaNew BusinessGuideandChecklist1990 .Divisionof EconomicDevelopment,Departmentof Commerce,Tallahassee,Florida. Thomas,WilliamA. SelectingYourFormofBusiness. CooperativeExtensionService,Universityof Georgia.