...Part A (The report) Part B (The memorandum) Student Name Western Governors University Part A (The report) Determining what type of business venture to either start or invest in can be challenging. Over the next several pages we will evaluate the various types of business organizations and at the end of this report; you should have an initial or better understanding of the different types of business forms. Sole Proprietorship: The word proprietorship can sound intimidating. It is important to remember that most things are simplified with knowledge. If your business is a sole proprietorship then you as an individual are the owner and operator of that business. This means the sole proprietor handles everything from setting up the business, which does not require an attorney to establish the business and you only have to report the name of your business if you choose to operate under a name other than your own. Then you need to register your business with the government. • Liability: All liability resides with the owner of the company and even their personal property could be implicated in a situation where the company fails due to poor market conditions, business strategy or if someone is injured as the result of company products or other. The person that owns the business is liable for all aspects of the business and could be drawn into legal actions based on outcomes of liability situations. • Income Taxes: The sole proprietor also reports all earnings...
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...Choosing a Business Structure Effie Dodge BUS311: Business Law I Instructor: Brandy Kreisler July 28th 2014 BUS311: Business Law I Choosing a Business Structure When deciding to open a business it is important to define the businesses structure. A business structure is the outline of a company’s operation plans and goals. Without a structure a company would fall apart. Therefore the first step in opening a business is to choose a business structure. In this paper we will discuss the different business structures and which structure fits my business the best. Business structures vary and there are six structures. However in this paper we will only discuss four: sole proprietorship, partnership, LLC, and a corporation. A sole proprietorship is the most common business structure. This type of structure has one owner who is entitled to all profit and accrues all the losses. In forming a sole proprietorship there is no formal action. As long as there is only one owner it is easy to form a sole proprietorship. With the proper permits and license one can have a sole proprietorship structured business. Within this structure taxes are not separate. Profit and losses are reported on one’s personal taxes. This business is fairly inexpensive to form and the owner has complete control. However there is a downfall to sole proprietorship. Because there is not separation between the owner and the company the owner can be held personally responsible for any liabilities accrued...
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...Lit1 Task 310.1.2-01-06 Part A Determining whether to start or invest in a business endeavor and what kind of business endeavor to choose can be challenging. Through this report the numerous types of business organizations will be assessed. By the end of the report you should have a greater comprehension of the different choices available. * Sole Proprietorship: To start off it is essential to have a clear understanding of what sole proprietorship means. As the sole proprietor you are the owner and the operator of that business. In more detail, the sole proprietor manages everything including setting up the business. An attorney is only needed if the sole proprietor plans to report the name of the business under a name other than their own. In that instance they would need to register the business with the government. * Liability: A full understanding of all liability and where it falls is very important. All liability falls on the owner on the company. This means that not only all of the company’s assets but also the owner’s personal belongings possibly will be occupied in any scenario where the company fails. More specifically, in the event that the company flops because of unfortunate market settings, poor business policy or if there is an injury suffered implicated by company products. The liability falls on the owner of the company including all characteristics of the business and can be brought into any legal actions. * Income Taxes: As a sole proprietor...
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...was discussed that most of the cost for a fireworks display is for skilled labor, insurance, and the actual service of setting off the fireworks. No other details were discussed. The owner is anticipating that new employees will need to be hired, but he is worried that if the large orders for fireworks displays do not continue, the company will not have the funds to pay the new employees. The owner is now considering changing the business entity, but he does not know what entity to form or how to form it. The owner has asked you to do the following: * Determine if the contracts with the businesses will be governed by common law or the Uniform Commercial Code (UCC), and explain why. * Analyze whether the owner formed a contract with the businesses, and apply the five essential elements of an enforceable contract. * Explain the potential personal liability to Acme Fireworks if a spectator is injured by a stray firework from a fireworks display. * Discuss the different employment types and relationships relevant to agency law, and analyze the advantages and disadvantages of each type specific to Acme Fireworks. * Explain why Acme Fireworks should not operate...
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...and physical resources As my business is starting up there are several legal statuses that I can have which are; Legal Aspects; * My legal status: Sole trader * Legal liability: Unlimited liability * Trading terms and conditions: Being owner of the business this means that I can do as I wish and go against the terms and conditions which I have set for my business, for example of a term would be the closure of the shop at 9pm A sole trader owned company is a business which is owned just by one person. There are several disadvantages and advantages when being a sole trader. Being a sole trader will mean that a lot of the businesses work will be on one person’s shoulders. This means there will be a lot of pressure and stress on the single person. Having privacy within a company is highly important, being a sole trader means that you have full control of the business and its financial incomes, this means that other companies don’t have access to your information. Also there are fewer legal restrictions so this will allow the business to be more flexible. However, hours are generally longer and working alone may mean that they will need more acquired skills for their business. Also there is no obligation when it comes to sharing profits. I have chosen to be a sole trader because as my business is small I feel like it would cause less complications then if I was to start as a partnership. Partnership A Partnership is where a business is generally owned by a minimum...
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...A Growing Business Liliana Drum BUS 311 Business Law I Instructor: Donald Ceplenski November 17, 2014 Although have a sole proprietorship type business can be straight-forward, deciding when to grow a business to handle larger amounts of transactions can be a difficult time. When first setting out in a sole proprietorship, decisions and business transactions are done through one person, when a situation occurs that calls for larger transactions and more employees, revamping the initial business model is not only necessary but demanded. Taking rest and reassurance in forming either a partnership or corporation can be a hefty decision, but will provide support and protection when dealing with large amounts of transactions and customers. Hindsight is always 20/20, and many small business owners stated then would have started their business with a more planned out and developed plan. When common law or the Uniformed Commercial Code (UCC) governs contracts, the difference between the two will drive how disputes are resolved. As a result of this concerted effort by some of this country’s leading legal experts, the UCC was enacted in whole or in part with only small changes by the legislatures of all states. While the UCC represents a significant effort toward a uniform national law, it should be remembered that there would still be variations from state to state Common law derives from judges making decisions in actual lawsuits and emphasizes the making of rules through...
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...Acme Fireworks Outline I. Introduction A. Thesis Statement There are many benefits to having a sole proprietorship in the firework business, but if the sales decrease will the owner be able to maintain a fully functional business entity with the extra staff that were incurred due to the demand of more firework displays that were put into contract? The owner wants to know more and I will try and help him with his business through proposing a new business entity, different employment types and relationships relevant to law, the liability to Acme Fireworks if spectators are injured due to his displays, and the contract and whether it is enforceable under UCC. II. Body paragraph #1 - Topic Sentence # 1 As with all other business, Acme would be no different when coming into a problem with potential personnel liability. If a spectator is injured by a stray firework from one of their display stands do you think they would be responsible or would the blame fall on someone else? A. Supporting Evidence In a recent excerpt from Findlaw.com states, “Injured spectators may be able to hold the person or company setting off the fireworks liable through negligence”. B. Explanation Regardless of where the firework display stands are set up for these different business organizations, Acme Fireworks will ultimately still be responsible for injury if for instance a stray firework were to go off and hit a spectator...
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...1) Explain if it matters that a parent literally had nothing to do with a biological child in order for the child to take advantage of the Family and Medical Leave Act (FMLA) to care for that parent. It does not matter if the parent literally had nothing to do with a biological child in order for the child to take advantage of the Family and Medical Leave Act (FMLA) to care for that parent. The FMLA does not specify whether or not the member of your family had to be active in the employee’s life as a child or not. What is clarified in the Family Medical Leave Act (FMLA) is that it must be for the care of an immediate family member (spouse, child or parent) who has a serious health condition (www.osrllg.com). In this case this is Tony’s biological father; the discrepancy was that he wasn’t a part of Tony’s life when he was growing up. Tony’s father is still considered his biological father whether he played a part in rearing Tony or not. If this was Tony’s stepfather or uncle it may still be considered immediate family, it’s up to the employer to decide on who’s considered immediate or not. An employee’s spouse, children (son or daughter), and parents are immediate family members for purposes of FMLA (www.fmlaonline.com). There have been cases where an employee has been approved for FMLA to take care of aunts, uncles and god parents and children if they have power of attorney or if they are considered a guardian. In order to get FMLA approved for someone that is not considered...
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...Legal Forms of Business Legal Forms of Business Entrepreneurs face a difficult decision in choosing a legal form of business. The preferred form of entity is dependent on many relative factors, such as the type of organization and business environment. Different forms of legal businesses have different tax, investment, and financial implications. The best-suited business calls for a thorough analysis of pertinent facts before making a decision – requiring some careful planning and strategy. This study provides an analysis of seven forms of legal business. Sole Proprietorship Sole proprietorships are fairly simple and inexpensive to create and operate. Legally, a sole proprietorship is inseparable from its owner, and therefore the owner is personally liable for business debts (Cheeseman, 2010). The tax implications for a sole proprietorship are simple. The business owner reports profits and losses on their personal tax returns. Sole Proprietorship is the preferred form of business in establishing or operating a small business where personal liability is not a big concern. Sole proprietors own businesses in many industries. Some of the more common sole proprietorships are landscaping services, housecleaning services, independent writing services, and tutoring services. * Landscapers tend to work alone or hire a small team of employees, providing landscaping services to homeowners and businesses. Sole proprietor may take on independent contracts and projects...
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...Business Structure Advice Michelyn Johnson FIN/571 July 7, 2014 William Mellett Business Structure Advice Many entrepreneurs will make the decision to start their own business and work for themselves. By doing this they must develop a business plan and decide on what business structure to use. Below is an email from an aspiring business owner asking for guidance on which way would be the best to start up and finance his business. Dear Consultant, I am currently starting a business and developing my business plan. I'm in need of some advice on how to start forming my business. I am not sure exactly how it will be financed and whether or not I want to take on partners. I am interested and willing to learn the intricacies of my options to determine how to best proceed with my plan. Please advise on what my options are, the advantages and disadvantages of each, and possible tax consequences for each scenario? Respectfully, John Owner The below response will explain to John Owner the different types of business structures there are, the advantages, disadvantages of each, as well as any tax perks or consequences. Business Structure Sole Proprietorship The simplest common structure of business is a sole proprietorship. This is “an unincorporated business owned and run by one individual with no distinction between the business and you, the owner” (The U.S. Small Business Administration, 2014). As long as you’re the only person that owns the business there is...
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...Christina and David in terms of selecting a business structure. These are sole proprietor, partnership and company. Option 1: Sole proprietor A sole propriety is an option for the start-up whereby one individual of the pair would control and manage the business. For example, David starts up, controls and manages the business and Christina is merely employed by David. The registration requirements of a sole proprietor would include David as the owner applying for an Australian Business Number and for a Tax File Number (Birt et al. 2012). David will need a TFN as and income he earns as a sole trader will be treated as his income and taxed accordingly. David will have sole responsibility for paying tax on the business’ income. David will have many options for the way he chooses to report the entity’s financial position. This may include using an accounting package such as MYOB to determine profit. A sole-trader structure is commonly used for hairdressers and tradesmen (Birt et al. 2012). Advantages: * The company start-up and wind-down is fast and is not costly. * The paperwork required to start-up is minimal (Birt et al. 2012). * David will have complete autonomy over the running of his business. * David will not be bound by accounting standards and legal regulations. * David can use accounting packages to report financial position of company- easier to use. * David does not pay a separate income tax for his business (Birt et al. 2012). Disadvantages: ...
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...Colorado Technical University Business Proposal and Formation Business Law I MGMT235-1503A-09 Unit 5 I P Instructor: Dr. Leslie Cooper-Blood By: Betty Smith August 10, 2015 Introduction to Lady B’s Salon This introduction is to institute the spawning of Lady B’s Salon within the state of Alabama. The company will be a full-service salon that offers an enormous amount of services that goes beyond the normal stylist salons. This proposal outlines the steps and measures that will be taken during the structuring of the development. The type of business that will be engaged within is a full-service beauty salon, which will incur a general partnership with my daughter, who is a licensed cosmetologist and will share all liabilities and profits/losses of the business. Within this salon business, the services that will be provided and/or offered will be hair stylists, barbers, nail technicians [manicures/pedicures], waxing and tanning, massage therapy, child care services, entertainment room/food service, and sauna rooms. In order to fulfill this business strategy, it will be necessary to engage in a full partnership with equal investors and attaining secured loans to support the business endeavors. The salon will offer many of the higher end products and services that will drastically increase the revenue and returns within the business. The salon will initiate in an approximately 3000 sq. ft. building and it will commence with some of the more trendy products and services...
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...Sole Proprietorship: is an unincorporated business that is owned by one person, the sole proprietor. An advantage of a sole proprietorship is that there are very few formal requirements for the creation, operation, and termination of the business. The sole proprietor may employ as much or as little capital as he or she sees fit and run the business as they so desire. Additionally all the profits are those of the sole proprietor. With that stated, the losses are also those of the sole proprietor. Since there is no separation in the legal entity between the proprietor and the business, all personal assets become attached to the debt of the business. Another disadvantage can come at the time, or untimely of death of the proprietor. There is no automatic continuation of the business. The business becomes part of the owner’s estate and can become subject to probate and “death tax”. • Liability- You risk everything, there is no legal separation between the business and the individual owner. The owner risks all assets, home, car, everything in his/her name. Unlike a corporation, sole proprietorships have unlimited liability and the proprietor is legally responsible for all debts. • Income Taxes- All business related income or losses must be reported on the owner’s personal income tax return. The business is not separately taxed. Deductions are allowed for business expenses in the same manner as any other type of business. The owner is paid simply by making draws...
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...LIT1 – task 310.1.2-01 through 310.1.2-06 Business Forms Sole Proprietorship – Sole proprietors are individuals doing business on their own. They have no partners or shareholders. A sole proprietor may have a free-standing business where he works or he may be a contractor or freelancer and travel as near or far as he pleases. If he chooses to move to another location or State, he can continue his business there. Some advantages to this type of business are that the sole proprietor makes all business decisions, has creative control and keeps all of the profits (or can reinvest them). He also saves the expense of creating a partnership or corporation. There are no forms to fill out if you are a sole proprietor: you decide to start a business and you do it. There is no legal obligation to become incorporated. Another advantage is that there are no special tax forms to fill out; the sole proprietor fills out a standard IRS 1040 form and includes his business earnings as Schedule C. Disadvantages that may come up in a sole proprietorship include not having enough capital to start or continue the Sole Proprietorship or not having the time to spend with friends and family due to a heavy workload. If the sole proprietor has employees, he may have difficulty retaining them due to the benefits offered by corporations that may be nearby. The sole proprietor is also the sole person responsible in the case of a lawsuit and is personally liable for any debt. A large court judgment...
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...Introduction After attending several lectures at xxx, I have decided to open a kiosk business in my estate selling potatoes. I therefore have to decide under what legal form to register my business after a careful consideration of the different pros and cons and finally identify what would make up the supply chain of my business. Background information There are a range of legal structures associated with different forms of business: 1. Sole trader businesses are the easiest to set up because there is no complex paperwork. The business and the owner are the same person in law. The sole trader does not have limited liability which means that they are responsible for all the debts of the business. The sole trader has to produce an annual accounting return for the Inland Revenue. 2. Partnerships are set up by a Deed of Partnership which is a document made out by the partners and witnessed by a solicitor. This Deed sets out the legal relationship between partners e.g. how profits will be shared out, responsibilities of partners etc. In traditional partnerships the partners had unlimited liability i.e. they were jointly responsible for the debts of their partnership. In 2001 this has been altered so that some large partnerships e.g. accountancy firms can have limited liability. 3. Companies are separate in law from the individual owners (shareholders) of the business. This means that should the business run up debts the shareholders are only liable for these debts up to the sum they...
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