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Organization Model for Accounting Company
A group of accountants who want to start their own accounting company need to make several considerations including having a clear vision of the firm's purpose and comprehensive understanding of the requirements of an entrepreneur in this field. In addition to these factors, the group of accountants also needs to examine and identify the most suitable organizational form of business for the accounting company. The need for identifying the most appropriate organizational form of business is fueled by the fact that finance and accounting companies usually provide a range of services to clients, which generates the need for effective organizational form of business to ensure coordination of the various services. Therefore, the groups of accountants seeking to start their own accounting business must decide and identify the suitable form of business organization.
Generally, there are various kinds of organizational forms of business with varying strengths and weaknesses. These differences contribute to the difference in the effectiveness of the specific organizational form of business in various settings and disciplines including accounting. Given that every organizational business form has varying legal and tax implications, it is important to conduct a detailed research of these differences before...
The first organizational form of business is a sole proprietorship in which the owner has all the liabilities for finances and operations of the business (Phillips, n.d.). In this form of business, the owner assumes risk against his personal assets in case of any financial challenges since his/her personal property is attached to the business. The strengths of this business model include simplicity of formation and control of operations. However, the disadvantages of a sole proprietorship include unlimited personal and professional liabilities, funding difficulties, and increased vulnerability of collapse.
The second type of organizational form of business is a partnership, which has at least two owners who share equal control in the operations and affairs of the business. However, a partnership agreement may not provide equal control to the partners or may establish the structure of a limited partnership. The main strength of this form of business organization is that the operating partners share the financial and legal risks of the business since these risks are not attached to an individual's personal assets. The weaknesses of a partnership include a more complicated decision making process and personal liability for business' debts.
The other type of business…
References
Hamel, G. (n.d.). Strengths and Weaknesses of a Partnership. Retrieved March 21, 2015, from http://www.ehow.com/info_7736835_strengths-weaknesses-partnership.html
Phillips, C. (n.d.). The Three Types of Business Entities in Accounting. Retrieved March 21,
2015, from http://smallbusiness.chron.com/three-types-business-entities-accounting-10242.html
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