Health Care Organizations (HCOs) utilizes various forms of other business organizations to maximize its outcome. There are four major types of business organizations that the HCO utilizes; proprietorship, partnership, corporations, and hybrid forms. The following sections will describe the each of those four forms in terms of their advantages and disadvantages associated with HCO. A proprietorship is also known as sole-proprietorship is a business which is owned by a single individual. Although the proprietorship is easy to get into, in most of the state, even the smallest business in HCO needs to be registered and licensed by the state. This form of organization is easy to form with limited resources and is subject to few governmental regulations …show more content…
This form of business is similar to proprietorship in terms of formations of the business. Earnings are treated as the personal income among the partners regardless the money was taken out of the business or retained in the business. However, there are three important limitations in these two (proprietorship and partnership) business have. a. Difficult to sell or transfer their interest in the business b. Unlimited liability- risk of bankruptcy in proprietorship, and obligations for partners to cover the liability in partnership c. Limited life of the business According to the text book, a corporation is a legal entity which separates the distinctions between owners and managers. A corporation has three main advantages: a. Unlimited life- unlike partnership and proprietorship, the life of the organization does not depends on the life of the owner who started it. b. Easy transfer of ownership- since the ownership in corporation is divided into shares of stock, the transfer of ownership is easy as it can be sold easily. c. Limited liability- as the ownership is scattered all over, it is difficult to acquire resources compare to …show more content…
This hybrid form is different than the three traditional form of business. Some of the specialized types of partnerships have characteristics different that the standard form of partnership. In case of Limited Partnership (LP), general partners have unlimited liability, whereas limited partnership are only liable for the amount that they invested. The LP has no control on the business. In the case of Limited Liability Partnership (LLP), the partners have the joint liability for all actions of the partnership. Despite of this, all partners have limited liability regarding the professional malpractice. This is because an individual is only liable for his/her own malpractice, not of other partners. Limited Liability Company (LLC) is a hybrid form of business, which has characteristics of partnership and corporations. The members (owners) are taxed as if they were partners. This is a complex form of organization, hence setting up can be both time and resources consuming. The Professional corporation (PC) (called professional association (PA)), is unique form of business common among the physicians and healthcare professionals. In this form of business, owners have benefits of incorporation, and are liable for malpractice. This form of business are often used by private clinicians. PC has very tight restrictions so at least one member needs to be
Partnership – “A legal entity formed by two or more co-owners to operate a business for profit.” (Longenecker, Petty, Palich, Hoy, Pg. 202) In a partnership, the advantage for the owners is the capability to reduce the workload and the financial burden, especially if each partner has management skills that enhances the business. The disadvantages of a partnership such as personal conflicts and leadership expectations, therefore this organizational form should only be chosen once all other options have been considered.
A corporate owner is an Individual or entity who owns a business entity to profit from the successful operations of the company. Generally, has decision making abilities and first right to
The current focus on new healthcare models is a reaction to long-standing concerns around quality, cost, and efficiency. Accountable Care Organizations model focus on integrated healthcare to promote accountability and improve outcomes for the health of a defined population. The goal of integrated healthcare is to ensure that patients, especially the chronically ill, get the right care at the right time, while avoiding unnecessary duplication of services and preventing medical errors (CMS, 2014). The following paper will analyze an ACO’s ability to change healthcare in the United States.
The corporation’s business is carried out by its management, under the direction of the Board of Directors. The Board, and each committee of the Board, has complete access to management. Also, the Board and committee member’s has access to independent advisors as each considers necessary or appropriate. Mallor, Barnes, Bowers, & Langvardt (2010) state that the Board of Directors also, issues shares, Adopts articles of merger or sha...
Based on the facts in case study three, a limited liability company, LLC is the recommended business entity for Arcadia Sports. The justification for this choice is that Jeb has the resources to start the business and Josh has the expertise to run the day to day operations. Jeb has no desire to be involved in the day to day operations of Arcadia Sports. Also, the two have decided to split the profits. Forming a LLC will protect Jeb from any liabilities that arise during the operating of Arcadia Sports and allow him to enjoy equal profits. Members of a LLC are not personally liable to third parties for debts, obligations and liabilities beyond their capital contribution (Cheeseman, 2015).
members’ ability to share the burden of being “on call” to cover patients during non business
What is the broader implication of managed care for health care services is how healthcare providers control health care cost and quality care. With all the competition to pick from and the rising cost of health care the consumers’ needs to look at all options available. The keys to manage care are the types of organizations and insurance options that include health (HMO’s) maintenance organizations, provider organizations PPO’ and POSS. The health insurance industry is big on wellness and prevention as part of managed care.
There are many different types of business structures, but if you own and operate a business that it is a sole
Health care sector generally has three types of hospitals like not for profit, for profit and hospitals run by governments. Not for profit organizations typically are the largest groups and are those organizations which are ran for public benefits and does not look for any profit. They charge very minimum and most are free of charge. "They are service oriented and try to give best treatment for those who cannot afford it. These hospitals are owned by nonprofit corporations that specialize in managing hospitals and health systems" (Williams & Torrens, 2008).
A successful sole proprietor, may be willing to form a partnership with interested investors to expand the business. There are three main types of partnerships: ordinary partnerships, limited partnerships and limited liability partnerships. An ordinary partnership is governed by the Partnership Act 1890 unless excluded in the partnership agreement, and section 1 of the act defines it as “the relationship which subsists between persons carrying on a business in common with a view of profit”. A partnership does not need to be formal, and can come about by oral agreement or conduct. Unlike companies, partnerships do not have a separate legal personality,Thus assets of the firm are directly owned by the partner...
Before a partnership formation is imminent, the business needs to decide on which type of partnership to form. There are three types of partnerships: (1) general partnerships, (2) limited partnerships, and (3) joint ventures. All three partnerships contain two or more owners, but all partners assume equal division of ownership, liabilities, and profits in a general partnership. Limited partnerships offer limited liability protection based on each partner’s contribution percentage. Joint ventures are classified as general partnerships with limited existence periods. Once a type of partnership has been determined, the business fulfills a series of requirements before the partnership can be successfully formed. The first step is to register
Shareholders have right to vote (usually one vote per share owned) on matter such as election of Directors , Fundamental Transactions , Proxy Rules etc.; sell their share at any times to generate profit as well as the right to share in distributions of the company's income, the right to purchase new shares issued by the company, and the right to a company's assets during a liquidation of the company .
Another disadvantage may be limited amount of time to stay away from the business, less holidays. Nearly the same, if a sole trader becomes sick or has an accident, the business may stop operating. Also, you will need to put money aside to pay tax; otherwise, you might have cash flow problems at tax time (Government, 1995). Legal liability In general, owners of different businesses mean they will have to face several in case of any failure and they have to start from the beginning to owning money. In case of partnership or sole trade business the owners will have unlimited liability but limited companies will have limited liability.
...s of a partnership are the shared profit factor, which can cause a lot of animosity among the partners if things do not go as well or if there is an unequal amount of contribution among the partners. Additionally, there is both individual and joint liability with partnerships. This can often cause dissention between the partners (“SBA”). Essentially, the sole proprietorship is the best choice because the risks are minimal because it is solely one individual, who can make the best choices and decisions and deal with the consequences that arise accordingly.
1.LIABILITY: There are no limits on liability with a sole proprietorship, the owner is responsible for all the businesses debts and obligations. The earning power of a sole proprietor can be limited due to lack of capital. The sole proprietor is only able to obtain personal credit to expand the company, the bank will not treat the company as its own entity