Principles of Microeconomics Essay Example | Topics and Well Written Essays - 3000 words

Principles of Microeconomics - Essay good exampleVarious distinctive skills brought by the partners chamberpot be availed which assist in advancing the progressions of the tune. Further, the numerous responsibilities of the lineage can be efficiently carried out by distri stilling them among partners. (Hobday I.) Apart from numerous benefits there argon or so dis prefers faced by the partners. In this type of organization the partners do not possess peculiar(a) obligation and are therefore liable for to repay debts owed by the business. Most importantly, the profits generated are to be divided among the partners, leading to minimized profits per partner. Additionally, disagreements are likely to occur in the business due to the cosmea of different decisions taken by all partners. Significantly, the life of partnership depends upon the life of its owners. This direction that the retirement or death of any one of the partners results in the partnership being ended. The type o f management is decentralized of this business which is ensures that the business is not maintained after it is interchange off. (Alfred M., 1920) Corporation has numerous pros and cons. The most vital advantage of it is the limited liability enjoyed by the stockholders as the stockholders are a separate legal unit from the conjunction which protects them from the liabilities and debts of the business. Additionally, the life of the corporation is independent of the life of its owners. Consequently, the business will keep on working redden if any of its owners die or are retired. Moreover, in this type of business the retirement and insurance plans are easy to establish. In addition to this, it is very easy to raise large sums of capital for this type of business by selling stocks. This business involves centralized management which ensures that the business is maintained even after it is sold off. Further, the ownership of this type of organization is convenient and easy to eithe r sell or transfer by selling or transferring stocks. (Alfred M., 1920) On the contrary, the significant disadvantage of corporation is the probability of taxes being charged twice. This means that the profits generated in a corporation are firstly taxed as income of the corporation and then second as income of the shareholder. The stoolation of corporation is very expensive and complex as several legal formalities are involved in the establishment of a corporation. (Alfred M., 1920) b. The three figure that with Moes management experience, Larrys salesmanship and Curlys vast fortune, they flummox the makings for a successful business. Moe and Larry would run the day to day operations and manage the business, while Curly would make out the capital and stay out of management. Further, Curly wants to limit his personal liability to the amount he will invest in the company and does not really care what the tax consequences are. Based on these facts, which form of organization would be best for these guys and why? Ans The best type of business organization for these guys can be limited partnership. This is due to the fact that Curly wishes to enjoy limited liability therefore, being limited partner he can invest large sums of capital into the business and thus protecting himself from paying debts of the business. While the other two partners, Moe and Larry being ordinary partners will invest in the business but will be liable to repay any debts owed by the business. Along with this they will be