Far Horizon Is a Firm With Many Aspects of Business, Essay Example

Far Horizon is a firm with many aspects of business. This is because of its current restaurant called Watcher Restaurant, a bar/lounge known as Idle Hour Bar/Lounge and the underway plans of putting up a multipurpose convention center to be known as 26 West Multi-purpose Convention Center. After making sure that the above plans have all been achieved, they later want to set up a 100-unit motel and a convenience store. This simply shows how well laid Far Horizon’s plans are. The management personnel are also seen to be quite experienced in their respective fields.

The forms of business organization that would be recommendable for the owner for this business would be as discussed herein. Firstly, it would be good to make it clear that sole proprietorship should be out of the question. This is because a sole proprietor business is that which is owned by one person who is solely responsible for the related obligations and Far Horizon seems to be beyond what a sole proprietor can do. The other thing that disqualifies it from being a sole proprietor is the complexity of the business. Sole proprietors are known to be very simple such that they can easily fall in the description “one man show” and Far Horizon’s nature only allows it to be run by a combined effort of skilled personnel hence cannot be a sole proprietor business.

The other form of business is partnership. A partnership is formed by an agreement made by a minimum of two people who bring their resources together to achieve a common goal. The rules of the game are to share everything related to the business equally. This includes the profits, losses and other things. The agreement made in a partnership should be done in presence of a lawyer. His role is to witness and therefore guide the parties in their agreement. This form of business can be divided into two types namely; general and limited partnership.

The difference between the two is that in general partnership, all members are equally liable incase of a loss while in limited, the unlimited partners get to bear a loss more just as they share higher profits. So the limited only suffer loss to a certain extent. Far Horizon would therefore consider operating as a partnership but the other forms of business organization should be considered for an optimal solution.

Cooperatives are also a form of business and just from the word ‘cooperate’ we get to know what they comprise. This is where people come together and contribute resources to execute a certain task or do business. Here the ownership and control is by members and they also exercise limited liability. This would not be such a bad idea for Far Horizon because all members are seen to be equal in terms of profit and loss sharing.

Far Horizon could also have an option of getting legal and this would best be done by forming a corporation. The business is supposed to be distinct from the members who are shareholders. The shareholders are said not to be liable personally incases of debt and other related obligations. A condition that has to be met is to include words such as corporation, limited and incorporated as part of their names. The name should then be used in all company documents. The corporations come in several types; the common types are public corporation and Private Corporation. Public corporation is that company where members of the public are given a chance to purchase a percentage of the shareholding in the particular company. Private Corporation on the other hand is said to be different from a public company simply because members from the public are not allowed to purchase shares in the organization. Far Horizon would therefore consider registering to be a public corporation so that it can enjoy the adequate capital involved. There are other benefits that are linked to registering as a corporation such as tax shields that have a direct impact on increase in profit and ease in acquiring capital.