...| Sole Proprietorship | Description | In a sole proprietorship, the business and single owner are one in the same. A single owner makes all decisions with regard to the business and the single owner retains all profits earned by the business. The single owner is also responsible/liable for all debts and obligations of the business on a personal level. | Two Advantages | A sole proprietorship is easy to create; there is minimal creation cost and time.The single owner has autonomy in decision making; sole owner makes all decisions related to the business and has complete ownership of business’s finances. | Two Disadvantages | It is impossible to add additional owners and to pass on business, business dies with owner. A single owner faces challenges with raising working capital and all loans made for the business are the personal responsibility of the owner. In addition, the single owner may be sued personally for the business’s liabilities. | Liability | Liability is unlimited; obligations of the business are personal obligations of the owner. The single owner is 100% personally responsible for business liabilities and debts. All of the owner’s personal assets are subject to lawsuit(s) made against the business. | Income taxes | The business itself does not file a tax return. There is no legal distinction between the owner and the business. All income earned by the business is considered personal oncome by the owner. Owner faces a higher rate of taxation because all business...
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...MEMORANDUM TO: Owner From: RE: Business Options Date: September 27, 2015 _______________________________________________ Changing the way you structure your business can be a frightening endeavor. You have been operating as a Sole Proprietorship for quite some time now, but it appears you have outgrown that business type. You have expressed a need to scale the business as well as a concern for your own personal liability. With those concerns in mind as well as the current state of your business, I recommend restructuring the business into a Limited Liability Company. I will try and address each of your concerns individually and explain how I came to this conclusion. As your business grows you will be opened up to substantial risk, should you decide to remain a Sole Proprietorship. You have expressed concern over debt and liabilities of the business. As an LLC you can protect your personal assets from future risk. Heaven forbid your business sustains a serious debt or claim that it isn’t capable of paying, but if does, your house, car, and personal possessions are safe from any business creditors. As an LLC you will continue to be taxed as a Sole Proprietorship with the ability to adapt to the future status of the business. You will not pay taxes on the income of the business; however profits and losses will pass through to you and be taxed on your own personal income tax returns. Should you take on another owner in the future, you will transition to be taxed...
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...Student I.D. E-Mail: Western Governors University LIT1: Task 310.1.5-02, 11, 13 Situation A: The employee’s FMLA right was satisfied when he was granted the leave by the company. The employee has been employed at the company for two years prior to his request, which clearly fulfills the requirement of working a total of twelve months before the leave must be granted by the company, which employees more than fifty employees. The request for leave was for birth care, which is a valid reason to request FMLA. All of the applicable provisions of the FMLA were adequately met for this particular employee. FMLA grants twelve weeks of unpaid time off and guarantees that the employee will then be able to return to the same job at the same rate of pay. FMLA provisions do not require paid time off as a mandatory action for the company; therefore, the employee cannot expect the company to pay eleven weeks of withheld salary and the company has not violated any FMLA rules by denying that specific request. Situation B: It is apparent the 68-year-old employee is performing his work duties adequately. The employee has an above average rating; therefore, it cannot be argued that his age is affecting his quality of work. Nothing to suggests that his work does not meet the standards of the company. This is an example of why the Age Discrimination Act of 1967 is so important and necessary. This given situation is an obvious violation of the Act. The employee is over...
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...Situation A The Family and Medical Leave Act (FMLA), passed by Congress in 1993, guarantees eligible employees up to “12 work weeks of unpaid leave each year for childbirth, adoption, or medical emergencies for themselves or a family member” (Beatty & Samuelson, 2010). The employee and company must meet several conditions for the law to be applicable. FMLA has a broad spectrum and applies to public and privately held companies differently. In the case of public agencies, FMLA applies to all local, state or Federal government agencies regardless of the number of employees, as well as public or private elementary or secondary schools (U.S. Department of Labor, 2012). Privately held companies, however, must have a minimum of 50 employees for the law to apply to its daily operations (Beatty & Samuelson, 2010). The employees can be at one location, or multiple locations as long as they are within 75 miles of each other (U.S. Department of Labor, 2012). FMLA dictates an eligible employee, who works for a covered employer, must have “worked for the employer at least 12 months” and have a minimum of “1,250 hours of service for the employer” in that 12 month period preceding when the leave was taken (U.S. Department of Labor, 2012). FMLA further provides for the eligible employee by requiring the employer to restore the employee to their original position and pay rate or to an equal position with “equivalent pay, benefits, and other terms and conditions of employment” (U.S. Department...
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...LIT 1 – Task 1 | SUBDOMAIN 310.1 - BUSINESS LAW | Competency 310.1.2: Organizational Forms | | | | The following report will summarize the key differences between the various forms of legal business entities. The ownership forms covered will include sole proprietorship, general partnership, limited partnership, C-corporation, S-corporation, and Limited Liability Company. Also included will be a brief recommendation of the most appropriate form of ownership for the given manufacturing business. | Section A- For each of the various forms of business ownership, a brief description outlining the basic impact on the following criteria will be given; * Liability * Income Taxes * Longevity or continuity of the organization * Control * Profit Retention * Location * Convenience or burden Sole Proprietorship Perhaps the most common form of business ownership, sole proprietorship, is generally the simplest form of business ownership due to the lack of separation between the entity and the individual. While there are positive and negative implications to any form of business ownership, these are generally more exaggerated in the instance of sole proprietorship. The ease of formation and ownership and limited regulation are strong benefits, however, the negative aspects are far greater than in any other form of ownership. The first negative ramification is the lack of ability to continue the company after the owner either becomes unable or...
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