Organizational Structure.doc

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ORGANIZATIONAL STRUCTURE 0 Organizational Differences Fatima M. Galan BUS 670 Legal Environment Instructor: Leah Westerman August 14, 2017
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ORGANIZATIONAL STRUCTURE 1 Organizational Structure The American Economy is driven by the businesses and organizations that provide goods and services. Said organizations are sometimes presented with liabilities, outside of the financial and accounting realm. In legal terms, liabilities are the obligations and debts and risks that can affect any business operation. The liabilities are met through the process of payments, financial agreements and securing risk as well as through economic benefits beyond the exchange of monetary transactions. Liabilities can also include mortgage notes, loans, accounts payable and receivables, accrued expenses or deferred revenues (Clarkson &Miller, 2012). Nonetheless, risk involves the loss or gain of such benefits that differ from the financial responsibilities. The liabilities can rest on different parties depending on the organizational structure by which the company is ruled. Following are the particular structures with liability assignees, depending on the legal aspects of ownership and shareholding: Name of Business Type of business Liable to debts Tinker’s Home Security Service Sole proprietorship Sole Proprietor Tinker & Tailor’s Home Security Service General Partnership Partners Tinker & Tailor’s Home Security Service Limited partnership General partners Tinker & Tailor’s Home Security Service Corporation Corporation Tinker & Tailor’s Home Security Service Limited liability company LLC Tinker’s Home Security Service (sole proprietorship): This is the easiest structure to set up a business as it requires minimal investment and legal paperwork. The sole proprietorship owner is subject to personal liabilities. This implies that, if in any case the business fails to settle debts from its margins then the owner is liable.
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ORGANIZATIONAL STRUCTURE 2 Clients or parties in contract can pursue the owner as an individual to settle debts of the business. In case of legal action or lawsuit, the individual owner owes and is obligated to meet the financial obligations. The parties involved have the right to interfere with personal assets including homes, vehicles as long as there isn’t a third party added to the title or the homestead state allows for such encumbrance. Therefore, the owner remains liable for any and all claims
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