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Explain The Three Main Organizational Forms Used In Forming A Business.

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QUESTION 1. Discuss three main organizational forms used in forming a business.

The three main organizational forms used in forming a business are Sole Proprietorship, Partnership, and Corporation. (Titman, Keown, & Martin 12 ed., 2014). Each form specifically describes the type ownership of a business. The Sole Proprietorship form is defined as a single individual ownership. It is when one person has sole ownership of the entire business and all its profit and debt are their sole responsibility. With that being said, it means business and personal asset are all together and they can lose everything at once to include business and personal assets and investments in this type of business and it’s taxed as personal income. It's also my understanding it’s the easiest type of business to set up because it don’t requires a lot of paperwork and one are liable for everything. The main thing is you don't have to share any of the profit. On the other hand …show more content…

Present value is describe as the money you currently has access to now, readily available on hand cash, checking and/or savings accounts. Future value is described as the value that you are scheduled to gain in the future as cash flow that will occur. The best example I can think of at the moment is money that are owed to you; meaning a onetime payment of a single future cash flow. And lastly, another time value is described as Annuity Payment, which I view as a regular reoccurring payment like my active duty retirement pay that I receive on a monthly basis. Interest rate is another good example of a time value due to growth rate of the money that you can potentially earn over the life of the investment. Also keep in mind, the earning rate will vary dependent on the amount of time allowed and the percentage rate

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