Entities of Business

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High School ・Business ・APA ・2 Sources

A business entity refers to a unit formed and administered following the corporate laws to permit its engagement in commercial activities. Forms of business entities include sole proprietorship, partnerships, cooperatives among others. A stakeholder refers to a person having an interest in a particular business (Urich, 2013). A sole proprietorship relates to a business entity that is formed and run by an individual. As a result, in the sole proprietorship, the owner and the business have no legal distinction. The owner, the customers and the government are the stakeholders for a single proprietorship business. The owner runs the business as well as enjoying the profits from the trading activities. On the other hand, the customers rely on the firm for goods and services (Willis, 2013). The government regulates the activities of the sole trader by issuing a trading license as well as taxation activities. The interest of the stakeholders does not conflict in sole trading.

A partnership refers to a business formed by two or more partners who agree to conduct business with an aim to generate profits or pursue an interest. The stakeholders in a partnership business include the partners, the customers, and the government. The partners are stakeholders since they are the owners and share the sale proceeds from the firm (Willis, 2013). The customers rely on the partnership for varied products and services. On the other hand, the government regulates the activities of the business to ensure it operates within the set laws. The partners may take part in the management hence limiting the stakeholder’s conflicts (Urich, 2013).

A cooperative refers to an entity formed by people having a common goal or interest. The aim of formation of organizations underlines the need to meet the economic, social and cultural needs of the members. The stakeholders for a collaborative include the shareholders, management, and the government. The shareholders invest in the business; hence they are part of the firm and they are interested in receiving dividends (Urich, 2013). The management has an obligation of conducting the day to day activities of the enterprise. The government through the cooperatives act plays a vital role in regulating the activities of the unions. Conflict of interest arises in the event where the management are engaging in activities that reduce the amount of money to be shared by the shareholders as dividends.

References

Urich, T. F. (2013). Business Organizations in the 21st Century: A Look at New Legal Forms for Business That Enhance Social Enterprise . Southern Law Journal, 241-305.

Willis, D. O. (2013, July 14). Business Entities. Retrieved from Research Gate: https://www.researchgate.net/publication/300405944_Business_Entities

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