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Choice of a form of Business Organization

Most of the times a client enters our office for professional assistance for opening a new business venture with a particular form of business organization in mind.But when we explain the nitty gritties,comparative tax advantages and host of other factors influencing a particular type of business organization,he often ends up in agreeing to what we recommend.Let us analyze what are the major factors influencing Choice of a particular form of business organization :

Location -Single/Multiple Locations-Single Location may make with proprietorship but multi locational business may require partnership or pvt limited co. to share profits and responsibilities.

Resources Available:Meagure resources may necessitate joining hands compromising authority.

Whether looking for outside finance:Looking outwards may require a more professionalized setup.

Confidence in the venture:Initially,conservatism is better so that resources do not go waste in case venture is unsuccessful.

Whether status conscious:Status conscious promoter should go in for corporate set up.

Business requirement-Tendering may sometimes require a particular type of set up which should be adhered to.

No.of persons having financial stake in business:If more than one,the setup should be other than sole proprietorship

Tax Advantages:Coprporate form may allow expense booking for those at the helm of affairs.Carrying forward of losses is easier as the individual tax returns are not much affected.

For further queries on the subject,pls write to us.

 
     
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