...LIT1 Task 1 part A Sole Proprietorship- This is the most common way to do a startup business in the US. There is no distinction between the owner and the business. This is owned by one person * Liability- The owner of the business is solely responsible for all liability (unlimited liability) * Income Taxes- The owner of the business pays taxes on the income generated as ordinary income. For tax purposes, all income needs to be reported on their personal tax forms. * Continuity-When the owner dies, the business dies with them * Control-The owner maintains control of the entire business throughout the life of the business * Profit retention- The owner keeps all the profit from the business * Expansion- The owner can expand or contract the business at will within compliance of the state laws * Compliance- In order to start a business the owner doesn’t need to do much. Taking freelance work or simply telling someone you are a business is legally all you need to start. Sole proprietorship does not have all the rules and regulations of some other business organizations. General Partnership- This is formed when two or more people agree to form a business and share in the profits, losses and responsibilities as partners equally. Easy to set up and can be financed in more than one way. * Liability- Each partner is jointly liable for the entire debt and losses of the business and the other partner. * Income Taxes-Income for the business...
Words: 1137 - Pages: 5
...Task 1 Part A Sole Proprietorship A sole proprietorship refers to a form of organization owned by a single individual. In this business, a single person makes all the decisions and does not have to engage a legal department to approve contracts. The owner of such a business can only use personal funds even though he or she may have separate checking and savings accounts for the business. The first characteristic of this form of business enterprise is liability. A sole proprietor suffers from unlimited liability. The owner becomes liable personally for all the obligations and debts of the business. The second characteristic is income taxes. Businesses pay federal income tax just like individuals. In a sole proprietorship, the owner pays income tax only once on the business income, which he or she reports on their personal income form. The third characteristic is control. In a sole proprietorship, the owner makes all the decisions concerning the business. In this business, the owner does not have to grant control to other people. The fourth characteristic is profit retention. If a sole proprietorship makes profits, the money belongs exclusively to the owner. The reason is that the owner and the business are one. The fifth is location. The owner can move or expand the business to a different state without consulting anybody. This is because the owner is the sole decision maker. The sixth characteristic is convenience or burden. The owner makes sure that the business complies...
Words: 2228 - Pages: 9
...Task 1 Part A SUBDOMAIN 310.1.2-6 In today’s world, it is imperative that entrepreneurs are well versed in business forms. Choosing the wrong form can prove to be disastrous. Below is a list of business forms that are in use today. Sole Proprietorship: Liability – A sole proprietor has unlimited liability. If insurance or business assets are not enough to cover company debts, the owner’s personal assets are accessible. Income Taxes – Legally, the sole proprietor and business and are viewed as one and taxed as such. This is pass-through taxation and it can be beneficial because generally personal tax rates are lower than corporation rates. Longevity/Continuity – There is no continuity with sole proprietorship. If the owner dies, the business ceases to exist. Control – One of the best reasons to have a sole proprietorship is autonomy. The owner has complete control of the business. Profit Retention – Pass-through taxation provides better profit retention for sole proprietors. Unlike a c-corporation, sole proprietorship is taxed at the business owners personal income tax rate which is generally lower than a corporation tax rate. Convenience/Burden – Setting up a sole proprietorship is the easiest of all business forms. General Partnership: Liability – All partners in a general partnership are equally liable for the debts or lawsuits claimed against the business. There is unlimited liability and one partner is responsible for the actions of all other partners...
Words: 1223 - Pages: 5
...Sole Proprietorship A sole proprietorship is a business that is owned by one person. This person may operate the business or he/she may contract the work out to another individual. The owner makes all the decisions concerning the business regardless of who actually performs the work. The limitless and peerless accountability is one of the key characteristics of the sole proprietor. Advantages of a sole proprietorship Some of the advantages of a sole proprietorship are the simplicity and autonomy of starting and maintaining a business. Once all of the proper state and local licenses and permits have been applied for the business is now operational as the sole owner sees fit. This also leads to a flexibility that allows the owner to make decisions as he/she chooses. Another advantage is sole gain. Since there is only one owner, then there is only one person to gain from the profits. Disadvantages of a sole proprietorship Oddly enough, the disadvantages of a sole proprietorship stem from the very reason that makes it so attractive – the complete identity of the business with its owner. If the owner does not already have the personal wealth needed to start up a business, he/she may find they have limited resources. If the sole proprietor seeks funds from outside investors, then the business ceases to be a sole proprietorship. This is the reason sole proprietorships tend to be restricted to small business ventures. Another disadvantage is the business is limited...
Words: 3217 - Pages: 13
...The following report will provide comparisons, advantages, and disadvantages of the 6 different forms of business organizations: sole proprietorship, general partnership, limited partnership, C- Corporation, S- Corporation, and Limited Liability Company. Sole Proprietorship A sole proprietorship is a type of business entity which legally has no separate existence from its owner. Hence, the limitations of liability enjoyed by a corporation and limited liability partnerships do not apply to sole proprietors. The person who sets up the company has sole responsibility for the company's debts. It is a "sole" proprietorship in the sense that the owner has no partners. A sole proprietorship essentially refers to a natural person (individual) doing business in his or her own name and in which there is only one owner. ( Wikepedia 2008) * Liability- Because there is only one owner all the liability is on the sole owner. * Income Taxes – A sole proprietorship is not a corporation; it does not pay corporate taxes, but rather the person who organized the business pays personal income taxes on the profits made, making accounting much simpler. (Wikipedia 2008) * Longevity or continuity of the organization: The sole proprietorship remains in existence for as long as the owner is willing or able to stay in business. When the owner dies, the sole proprietorship no longer exists. The assets and liabilities of the business become part of the owner's estate. A sole proprietor can freely...
Words: 1860 - Pages: 8
...Sole Proprietorship: Sole proprietorships are businesses that are owned and operated by one person. The business and the owner are one and the same, as there is no legal separation between the two. The owner would only have to register as a business if he were to operate under a fictitious name or if they provided services requiring a license. * Liability: As there is no legal separation between the owner and the business, 100% of the liability is on the owner. He or She would be responsible for all debts, accidents, losses, etc. * Income Taxes: Aside from having to file a Schedule C, the owner would file income taxes normally. Because the owner and the business are one, all profits or losses are reported through their personal income tax forms. * Longevity or Continuity of the Organization: The continuity of a sole proprietorship hinges on the wellbeing of the owner. The company and the owner are one, so neither can exist without the other. In very rare circumstances, proper legal documents can keep the company alive in the event of the owner’s death. However, it is unlikely to continue in most cases. * Control: Sole proprietorships are convenient because they provide the owner with full control. The owner can make any decision necessary without having to get any approvals or permissions. * Profit Retention: Profits are normally kept by the owner and can be put back into the business for growth or kept for personal gain. * Location: While the sole proprietor...
Words: 1775 - Pages: 8
...Task 2 Lit 1 Mallory Carter Situation A. Employee A has been with Company X for two years. Employee A's spouse gave birth prematurely to twins. He requested leave to be with his spouse, which was granted. Employee A has been on leave for 11 weeks, and has asked to return to work, and to be paid the withheld salary from his 11-week leave. The previous department manager left the company during Employee A’s leave. The new manager has agreed to Employee A’s return to the previous job, at the previous rate of pay. But the manager has denied the request for the 11 weeks of withheld salary. -Employee A will not be able to retain any of his pay while he was on leave for the 11 weeks. Under the FMLA, the employer is not required to pay the employee while on unpaid medical leave. The FMLA covers unpaid leave for up to 12 weeks. It also requires that the employee be reinstated to its previous position without problems, which was taken care of. Even though there is a new manager they are following the procedures under the FMLA and will not be penalized for not paying employee A’s salary. Employee A should have looked in his leave further before deciding to take leave. There was not a violation of the FMLA. Situation B. Employee B is 68 years old and has been with Company X for 42 years. During the annual performance review last month, it was determined that Employee B was doing “above average” work in the department. Employee B was denied a promotion due to age. A co-worker...
Words: 656 - Pages: 3
...Situation A The Family Medical Leave Act (FMLA) of 1993 states that any employee who has been on the job for 12 months, worked 1,250 hours in the last 12 months, and at a company of at least 50 people in the U.S. is eligible for 12 weeks of unpaid leave. The leave may be used for a personal serious health condition, to take care of an immediate family member with a serious illness, or for the birth/adoption/placement of a child. The employee is entitled to return after the leave period to their original job or an equivalent job with identical pay, benefits, and other terms and conditions. Employee A has the right to take up to 12 weeks off of work for the birth of his premature twins, he is also entitled to return to his original job with original pay. Employee A is not entitled to pay for the 11 weeks he was on leave. Company X has not violated any laws in this situation. Employee A may still take another week of leave, the leave was for an appropriate reason, and FMLA leave is unpaid. Situation B The Age Discrimination in Employment Act (ADEA) of 1967 prohibits employers, with 20 or more employees, from discriminating against individuals on the basis of age. ADEA applies to any employee or applicant 40 years old or older. It is permitted for an employer to discriminate based on age to favor older workers even when doing so negatively affects a younger worker who is 40 or older. The only exception the ADEA is if there is a “bona fide occupational qualification” (BFOQ)...
Words: 733 - Pages: 3
...Situation A Based on the United States Department of Labor (USDL) Family and Medical Leave Act of 1993 (FMLA), provisions can be made to arrange work leave for a variety of reasons. These situations include; the birth of a child within one year of birth, placement of child for adoption or foster care within one year, to care for spouse, child, or parent with serious health conditions, a health condition that makes the employee unable to perform his or her duties, and any qualifying active military personnel summoned for urgent need. (USDL2013). Employee A has been with Company X for two years. Employee A requested and granted leave when his children were born prematurely. Employee A’s leave lasted for 11 weeks. When he requested to return to work, he also requested to be paid the withheld salary from his 11 week leave. According to the given information it seems that no laws were violated because Employee A was granted leave and was able to return to his previous position with his previous pay. No information was documented from the previous manager stating that he should be given any withheld back pay. Situation B According to the United States Equal Employment Opportunity Commission (EEOC) and the Age Discrimination Employment Act of 1967 (ADEA), individuals who are 40 years of age or older cannot be discriminated against based on age. As long as employees are able to complete and maintain job tasks age should not be a factor in hiring, firing, and/or promotion. Employee...
Words: 570 - Pages: 3
...Task 1 Part A Sole Proprietorship A sole proprietorship refers to a form of organization owned by a single individual. In this business, a single person makes all the decisions and does not have to engage a legal department to approve contracts. The owner of such a business can only use personal funds even though he or she may have separate checking and savings accounts for the business. The first characteristic of this form of business enterprise is liability. A sole proprietor suffers from unlimited liability. The owner becomes liable personally for all the obligations and debts of the business. The second characteristic is income taxes. Businesses pay federal income tax just like individuals. In a sole proprietorship, the owner pays income tax only once on the business income, which he or she reports on their personal income form. The third characteristic is control. In a sole proprietorship, the owner makes all the decisions concerning the business. In this business, the owner does not have to grant control to other people. The fourth characteristic is profit retention. If a sole proprietorship makes profits, the money belongs exclusively to the owner. The reason is that the owner and the business are one. The fifth is location. The owner can move or expand the business to a different state without consulting anybody. This is because the owner is the sole decision maker. The sixth characteristic is convenience or burden. The owner makes sure that the business complies...
Words: 3972 - Pages: 16
...Family Medical Leave Act (FMLA) Major Provision of FMLA The Family Medical Leave Act was enacted into law in 1993 to enable workers to take time off from work to care for their new children, themselves or immediate family members in the event of a serious medical condition. Additional legislation passed in 2012 allows covered employees up to 26 weeks of unpaid leave to care for eligible service members with serious medical conditions. FMLA applies to all private companies with fifty or more employees and the employees of public and school employers, regardless of the number of individuals employed. Employees must have a minimum of twelve months employment with the covered employer and worked a minimum of 1250 hours in that twelve month period. FMLA provides individual employees of eligible employers with the ability to take up to 12 weeks of unpaid time off in a 12 month period, including intermittent and reduced schedule with the employer's approval. FMLA can be used by covered employees to provide care for newborn, adopted or foster children; to provide assistance to immediate family members with serious medical conditions or to address serious medical conditions of their own. Employees covered by FMLA are able to maintain their group health coverage benefits during the period of leave and are able to return to the same job, or equivalent, with the same pay as their earnings prior to FMLA absence. Employers are required to provide employees with notice...
Words: 1303 - Pages: 6
...Sole Proprietorship: A Sole Proprietorship is the most common form of business in the United States. There is no difference legally between the owner and the business. An advantage to a Sole Proprietorship is the ease and inexpensiveness of the initial setup. On the other hand, the owner has to pay the company’s taxes on their personal taxes and is personally liable for all debts and legal actions against the company. * Liability : The owner has unlimited liability and is completely liable for all debts of the business * Income Taxes: The owner pays the taxes, not the business. * Longevity or Continuity: If the owner dies, the business dies with them. * Control: All business decisions are made by the owner. * Profit Retention: All profits stay with the owner and there is no sharing of the profits. * Expansion/Location: The paperwork required depends on the type of goods and services they intend to perform and if there are permits and licenses required to perform or provide the specific goods and services. This is dictated by the federal, state, and local government. * Compliance/Convenience: This is very easy to setup and they only need to register if using DBA or if the business requires a license or state permit. General Partnership: In a General Partnership, two or more people join in a partnership to run a business. It is very simple to set up and all decisions are split amongst partners. Disadvantages are...
Words: 1445 - Pages: 6
...A. Sole Proprietorship Operating as a Sole Proprietorship as you are now does not protect your personal assets in the event a suit was brought against your company. Sole proprietorships do not differentiate between the business and the individual whom owns the business. In order to be recognized legally as a business you will need to file for an EIN (Employer Identification Number) this in effect is your business’s social security number. As a Sole Proprietor you are only obligated to pay taxes once a year as you would an individual whom did not own his own business. You are however, able to use business expenses as deductions which can in effect lower your tax burden. Regarding longevity, being a Sole Proprietor as you are aware, limits the continuity of your business. You are unable to bring in partners to the business and continue to operate as a Sole Proprietor. Because you are solely responsible, this means you also do not have to share profit. You are able to use the profit as you see fit. Similarly related, you also have complete control over all decisions. Decisions such as where your business is located and how many locations you have and whether or not you would like to operate in other states are all matters you and you alone have control over. If you decide to operate in additional states you will need to register a new DBA in each state and check with each state regarding their requirements of operating a sole proprietorship. There are many conve...
Words: 1869 - Pages: 8
...PART A Sole Proprietor This is the most common type of business ownership. It only requires one person, who can work by themselves or contract work out but does not have partners. ● Liability The business owner and business are seen as one. Whatever profits the business makes, the business owner makes. Also, whatever debts the business takes on, the owner is responsible for. ● Income Taxes Because there is no difference between the owner and business, all business profits must be claimed on the owner’s personal taxes. ● Longevity/Continuity The business can continue as long as the owner is alive. This type of business cannot be passed on. ● Control The owner has the total control over the business. They make their own decisions. ● Profit Retention Whatever the owner makes from the business is theirs to keep, however they usually will put some of the money back into the business. ● Location No forms are necessary. Wherever the business owner sees fit, the business can move without issue. ● Convenience/Burden The easiest business to start on your own however the owner is fully liable for anything that happens with the business. General Partnership Two or more unincorporated people form a business and still have liability, as with a sole proprietorship. The benefit is that there are two (or more) people to share responsibility. ● Liability Business owners and the business are still seen as one, same as in the sole proprietorship...
Words: 1357 - Pages: 6
...In the United States, several laws have been enacted to protect the rights of workers and provide guidelines to employers. The Family Medical Leave Act of 1993, the Act of 1990, and the Age Discrimination Act of 1975, provide clear guidance to employers and employees when addressing workplace concerns. Employees and employers must understand the requirements of each law to ensure proper implementation and avoid conflict. Situation A Family Medical Leave Act (FMLA) Congress enacted The Family Medical Leave Act of 1993 to balance the workplace and personal needs of employees (J. J. Keller & Associates, Inc., 2011). The act provides protection for employees needing to take time off to address personal health needs and those of immediate family members. The act also provides time off to men and women to care for a new baby. In addition, the act provides stability to employees. Before the law was faced the prospect of job loss if personal or family health issues prevented them from working. Employers must offer job protection to employees as long as proper notification and documentation is provided. Eligibility. There are specific eligibility requirements for Family Medical Leave. An employee is eligible for twelve work weeks of Family Medical Leave if the company has more than fifty employees, who commute within seventy five miles of the work location. Leave may be continuous, intermittent or a reduced schedule. Employees are required to work for the company twelve months prior...
Words: 1667 - Pages: 7
