Sunday, April 24, 2011

Types of Business Organizations

In introductory accounting, we learned about the 3 main types of business organization: proprietorship, partnership, and corporation.

Each of these organizations has it's own benefits and drawbacks, and before deciding how you are going to organize your business, it is helpful to review what those are.

I'll make a very quick summary of each of the business organizations...

1. Sole Proprietorship.
This is perhaps the easiest way to start a business, and usually does not require a lot of cash up front. You are the sole owner of the business and you are liable for everything that happens with the business, including debt, losses, and profits.
Many of the local mom & pop shops, such as small clothing stores, hair salons, and spas are sole proprietorships.

2. Partnerships.
A partnership is a business with more than one owner. However, all partners are responsible for everything that happens with the business (which is different from a corporation). This means that partners are not separate economic entities, and that they may have to make personal financial sacrifices to repay the debts.

The biggest advantage of a partnership is that 2 (or more) heads are better than one, so if one person is good at one thing and another person is good at the other, then the business will be much stronger than having just one sole proprietor do all the work.

3. Corporation.
In a corporation, the owners (people who invested the money) become shareholders. They are not liable for anything that happens to the business because the shareholders' personal assets are separate from that of the corporation.

Hope this was helpful,

"Start Something with Alesse" Final Results

A couple of months ago, I took part in a very interesting competition called Start Something with Alesse.

The objective of the competition was to submit an idea that you would like to start (busines, personal project, or charity)in the near future. Then, the judges choose 6 finalists and the 2 winners are determined by online voting.

I didn't think that my idea of "YOUNight for Compassion and Fashion" would ever be chosen as a finalist because there were hundreds of entries, the chances of my entry getting considered were slim, just by the nature of probability.

The results:
I was not an official winner, and therefore first and foremost, I would like to congratulate the 2 winners, Sheyla Abdic and Sedina Fiati. Congratulations, ladies!! :)

Second, I am very happy to have taken part in the competition because I had the chance to look at some of the other great ideas that were chosen as finalists, and I think that all the finalists did a great job.

Third, although I did not win, I got a chance to talk to some great people from the local community and got to meet people that I would not have had the chance of connecting with if it wasn't for the competition.

Fourth, I believe that the fact that I did not win this does not mean that I cannot pursue the idea. The idea is for a great cause, and therefore, with a good team and a little bit of pounding the pavement, it can still become a reality.