Suggestion / Inquiry

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.

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