Legal Forms of Business Organizations

FIN/419

Legal Forms of Business Organizations

In business, there are legal forms that organizations are classified under. There are three most common forms of business organizations, sole proprietorship, partnership, and corporation. The life cycle theory of the firm starts out as a proprietorship. As a firm grows larger, more complex and needs more capital than is available from the proprietor, the proprietor can choose to change the firm's Legal Form Organization to a partnership, legal liability company, S-corporation or C-corporation. Only about one in three firms begin life as a proprietorship, while almost as many begin as limited-liability companies and as corporations according to "How Do Firms Choose Legal Form Organizations?" by Rebel...