Types of Businesses – Definition of Business Types

A man is known by the company he organizes. – Ambrose Bierce

[Types of Businesses] – Owning your own business is a major part of having great economic success in a capitalistic society. There are many types of businesses to choose from so one of the first decisions you’ll make is the type of business to open. There are several options to explore for the structure of your business. This article will give you the definition of three of the most popular business types. These types of businesses are: (1) Sole Proprietorship, (2) Corporation, and (3) Limited Liability Company.

(1) Sole Proprietorship – individual ownership and operation of a business.

A sole proprietorship is not a separate organization and does not have any formal requirements for formation. The individual simply begins doing business. Most sole proprietorships are small businesses, and initially their business capital needs are small. Typically, the individual provides the funds. In order to get financing, a sole proprietor takes personal financial risk. The income of the business is the income of the sole proprietor and is reported on the individual’s income tax return. The proprietor is the manager of the business. The business can be transferred only if the owner allows it.

(2) Corporation – any entity formed by statue that has rights of a legal person along with limited liability for its shareholder owners.

Formal public filing is required to form a corporation. A corporation may use short-term financing or debt and equity financing. Limited liability for shareholders is one of the advantages of corporate organization. Corporations have the tax consequences of double taxation. Many shareholders may own a corporation but the board of directors controls the operations. Shareholders have the opportunity to express their views at the annual meeting by electing directors who represent their interests. A corporation can be dissolved voluntarily or involuntarily.

(3) Limited Liability Company – newer form of business organization in which liability is limited except for conduct that is illegal.

An LLC is formed by filing the articles of organization with a centralized state agency. Members of an LLC make capital contributions in much the same way as partners make capital contributions. Members of an LLC have limited liability; the most they can lose is their capital contributions. The LLC does not pay taxes; income and losses are passed through to the members to be reported on their individual returns. Members of an LLC adopt an operating agreement that specifies the voting rights, withdrawal rights and issues. A member’s LLC interest is personal property and is transferrable. Most LLC statues provide that the LLC dissolves upon the withdrawal, death, or expulsion of a member.

The definition of these business types is just the beginning of understanding how to fully utilize each structure. Because there are several types of businesses it is important to know the advantage and disadvantage of each. The type of business you organize will determine a lot about how you reduce liability, protect your assets and pay your taxes. Defining the business type for you is important in “Creating Your Own Lane” in business success.

Importance of Using Wooden Furniture and Wooden Products

Furniture is the only thing which increases the beauties of your home a lot. It pulls towards the guests to your home. So if you have a beautiful home then you should have good furniture in your home. If you are not sure what kind of furniture is suitable for your home then here is a perfect solution for you. These days, wooden furniture and wooden products are most popular than any other. Those days are passed when people used iron furniture or iron products. These are strong than wooden products but odd in looks. However there are lots of advantages of wooden furniture.

It is not true that wooden furniture and wooden products are not durable at all. If the products are made up of good quality of woods then there is no doubt about its durability. These have lighter weight than iron products. So it becomes easier to shift those from one area to another area. Therefore, if you are residing in a rental apartment then you need to use. Not only that, you can separate the parts of wooden furniture but in case of iron or steel you can not do that as those are fixed. This feature makes the wooden furniture more outstanding one.

Wooden household products are safer than iron products as wood does not conduct electricity. So it is safe for everyone in your home, especially for the children. As these are not heavy so it will not damage your sophisticated floor even after a great crash or collision. Like this you can maintain your home-floor by using the wooden furniture. You can renovate the furniture whenever you need or wish as these are not fixed like the material substances. This easy renovation feature adds another finest quality to these wooden products.

The wooden furniture and wooden products are cheaper than the iron or steel products. If you are planning for decorating your home but you do not have so much money then you can choose these wooden products. Even if you have sufficient money but you want to make your home more beautiful then you must go for the wooden furniture. At present, these are used not only in residential houses but even in commercial areas as well. You can see the wooden furniture instead of iron or steel furniture in hotels or restaurants, offices as this increase the beauty a lot.

Overall it can be said that wooden products or furniture will be the best choice. These days, the use of iron or steel products is even called old fashion. So why should not you use the wooden products or furniture while you are getting so much advantages.

What Are FSA Employment Checks?

The pre employment background checks are the standard procedure for hiring in almost every successful organization. The FSA checklist is a useful tool to use for verification and better assessment of the potential employees.

The Key FSA Employment Checks include the following areas

1- Past Employer Reference

2- Education Document Authentication

3- Character Reference

4- Identity and Address verification

5- Credit History and similar issues

6- Criminal History

7- Directorship History (where applicable)

The FSA Employment checks include some few key steps like the cross verification of the references being provided. It depends upon the nature of the job for which person has been selected to really seek the back ground reference checks. For the person being considered on sensitive jobs, this reference can be started right from the first employment.

The verification of the Education credentials is done too; the universities or the institute where the person has graduated is asked for the authentication of documents too. This is important step if you are hiring a person from another country. Although there are certain degrees that might be accredited for being equal to U.S. degree, but most of the time gaps can be there regarding the whole study curriculum being out dated.

The FSA Employee Checklist is important also as the CVs tend to over state and include a lot of information that might not be true, so better find out this before hand then later. The checking of relevant professional qualifications and licenses is important step for assessing the candidate capabilities in true light.

The character checks has significance too, as this verification alongside the criminal record or ID background can confirm the social standing of the employee easily. The directorship information can determine the candidate ability in so many others light also. There are some important clauses that can affect the selection process very easily in case of the director ship being involved so it’s important where applicable.

Management and Financial Accounting

Accounting is usually seen as having two distinct strands, Management and Financial accounting. Management accounting, which seeks to meet the needs of managers and Financial accounting, which seeks to meet the accounting needs of all of the other users. The differences between the two types of accounting reflect the different user groups that they address. Briefly, the major differences are as follows:

  • Nature of the reports produced. Financial accounting reports tend to be general purpose. That is, they contain financial information that will be useful for a broad range of users and decisions rather than being specifically designed for the needs of a particular group or set of decisions. Management accounting reports, on the other hand, are often for a specific purpose. They are designed either with a particular decision in mind or for a particular manager.
  • Level of detail. Financial reports provide users with a broad overview of the performance and position of the business for a period. As a result, information is aggregated and detail is often lost. Management accounting reports, however, often provide managers with considerable detail to help them with a particular operational decision.
  • Regulations. Financial reports, for many businesses, are subject to accounting regulations that try to ensure they are produced with standard content and in a standard format. Law and accounting rule setters impose these regulations. Since management accounting reports are for internal use only, there are no regulations from external sources concerning the form and content of the reports. They can be designed to meet the needs of particular managers.
  • Reporting interval. For most businesses, financial accounting reports are produced on an annual basis, though many large businesses produce half-yearly reports and a few produce quarterly ones. Management accounting reports may be produced as frequently as required by managers. In many businesses, managers are provided with certain reports on a monthly, weekly or even daily basis, which allows them to check progress frequently. In addition, special-purpose reports will be prepared when required (for example, to evaluate a proposal to purchase a piece of machinery).
  • Time horizon. Financial reports reflect the performance and position of the business for the past period. In essence, they are backward looking. Management accounting reports, on the other hand, often provide information concerning future performance as well as past performance. It is an oversimplification, however, to suggest that financial accounting reports never incorporate expectations concerning the future. Occasionally, businesses will release projected information to other users in an attempt to raise capital or to fight off unwanted takeover bids.
  • Range and quality of information. Financial accounting reports concentrate on information that can be quantified in monetary terms. Management accounting also produces such reports, but is also more likely to produce reports that contain information of a non-financial nature such as measures of physical quantities of inventories (stocks) and output. Financial accounting places greater emphasis on the use of objective, verifiable evidence when preparing reports. Management accounting reports may use information that is less objective and verifiable, but they provide managers with the information they need.

We can see from this that management accounting is less constrained than financial accounting. It may draw on a variety of sources and use information that has varying degrees of reliability. The only real test to be applied when assessing the value of the information produced for managers is whether or not it improves the quality of the decisions made.

The distinction between the two areas reflects, to some extent, the differences in access to financial information. Managers have much more control over the form and content of information they receive. Other users have to rely on what managers are prepared to provide or what the financial reporting regulations state must be provided. Though the scope of financial accounting reports has increased over time, fears concerning loss of competitive advantage and user ignorance concerning the reliability of forecast data have led businesses to resist providing other users with the detailed and wide-ranging information that is available to managers.