FNU Major Disadvantage of A Sole Proprietorship Discussion Summary Response


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The Major Disadvantage of a Sole Proprietorship

A sole proprietorship is a business structure where one person owns and runs the business. It is a widespread business organization in the United States and other developed nations. A sole proprietorship has no formal board of directors or shareholders. The owner is responsible for all business’s financial, legal, and operational aspects (Lobo & Bhat, 2022). There are several major disadvantages associated with a sole proprietorship. First, it is straightforward to lose track of responsibilities when running own business. The owner of the business may feel like they need to be hands-on all the time, but if one has employees to manage, this isn’t always necessary (Lobo & Bhat, 2022). Second, there is no formal structure for managing finances or employee relations. It may be difficult to resolve if a problem arises without involving an attorney. Finally, a sole proprietorship doesn’t offer any protection from lawsuits because no third party is involved.

A Corporation Differ from A Partnership

A corporation is a business entity that has its own set of rules and regulations, as opposed to a partnership, which is an unincorporated business that does not have its own legal identity. While multiple people can own partnerships, corporations are owned solely by their shareholders. Corporations also have bank accounts and must file annual reports with the IRS (Bouchoux, 2022). In addition to the differences between a corporation and a partnership, there are other important legal distinctions between these two types of business entities. For example, corporations must have separate ownership from their shareholders. For shares in a corporation to be sold or transferred, they must be registered with the SEC (Bouchoux, 2022). This means that shareholders must file paperwork with the SEC to transfer ownership of their shares. If a corporation wants to sell or transfer shares over the internet or through other channels, such as private sales or secondary market trading, it must also register with the SEC. Corporations also have different reporting obligations than partnerships do. Corporations must file annual reports with the IRS and make certain information available to the public through SEC filings.

At the same time, the main distinction between a corporation and a partnership is that corporations are legally recognized as persons and may own property. In contrast, partnerships are groups of individuals agreeing to share ownership in a business venture. Although there are many differences between corporations and partnerships, the most significant difference is that corporations are considered legal entities separate from their owners, while partnerships are not (Bouchoux, 2022). There are other key differences between corporations and partnerships, including who may be a member, how they can be organized, how much they can grow, how long they need to last and what rights they have. Corporations are owned by one or more people known as shareholders who hold shares of stock in the company. Shareholders may include the company’s officers, employees or other members (Bouchoux, 2022). While shareholders can be anyone interested in the company’s success, they must meet specific requirements to become members. For example, they must be 18 or older and have a minimum amount of money invested in the corporation’s shares. Corporations cannot have more than 100 shareholders at any given time.

Conflicts Between Managed Care Organizations and Physicians

Managed Care Organizations (MCOs) can provide significant financial incentives to physicians for encouraging healthier patient behaviours, such as regular check-ups. The financial incentives can be in the form of bonuses, rewards, or even salary increases (Heider & Mang, 2020). However, some doctors may find this approach undesirable because it can create an environment of competition among physicians and provide less autonomy for individual practice settings. Additionally, MCOs tend to focus more on volume than patient-level quality care due to their desire to decrease overall costs. In these scenarios, physicians may feel they are being left out of the financial rewards and may become frustrated with the organization (Heider & Mang, 2020). It is essential to establish clear goals and expectations in a relationship with an MCO to avoid conflicts between MCOs and medical doctors. Physicians must also be provided with the necessary tools and resources to achieve these goals and expectations.

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