1, list and discuss the types of business organization under the new commerical code of ethiopia. (hint,nature, diffference,similarity, etc )
* reference only explain ?
Under the new Commercial Code of Ethiopia, the types of business organization recognized include:
1. Sole proprietorship: This is a business structure in which one individual owns and operates the business. The owner is personally liable for all debts and obligations of the business, and profits are taxed at the individual level.
2. Partnership: A partnership is a business structure in which two or more individuals or entities share ownership and management responsibilities. Partnerships can be general partnerships, limited partnerships, or limited liability partnerships. In a general partnership, all partners are personally liable for the debts and obligations of the business. In a limited partnership, there are both general partners who have unlimited liability and limited partners who have limited liability. In a limited liability partnership, all partners have limited liability.
3. Corporation: A corporation is a separate legal entity from its owners, known as shareholders. Shareholders are not personally liable for the debts and obligations of the corporation, and profits are taxed at the corporate level. Corporations can issue stock to raise capital and have a perpetual existence.
4. Limited Liability Company (LLC): An LLC is a hybrid business structure that combines the limited liability of a corporation with the flexibility and tax benefits of a partnership. Members of an LLC are not personally liable for the debts and obligations of the business, and profits are taxed at the individual level.
The nature of these business organizations varies in terms of liability, taxation, ownership, and management structure. Sole proprietorships and partnerships are often simpler and easier to set up, while corporations and LLCs provide greater protection of personal assets and potential tax advantages. All types of business organizations are similar in that they are legally recognized entities that allow individuals to conduct business activities. It is important for entrepreneurs to carefully consider the nature of their business and their goals in order to choose the most appropriate business structure for their needs.