...hybrid. The owners of a limited liability company are shielded from the personal liability of the corporation, and all profits and losses pass directly to the owner’s without taxation of the entity. In order to form a limited liability company, the articles of organization must file with the state and pay the associated fees (uslegal, Limited Liability Corporation Law & Legal Definition). A limited liability company is owned by its members. If the limited liability company uses managers, the members will more closely resemble stakeholders as they do not make management decisions. If the LLC does not use managers, then the members will be more like partners as they will have a direct say in the decision making of the company. There can be an unlimited number of owners in an LLC. Limited liability corporations are not required to hold annual meetings and keep minutes as corporations are. An LLC has a limited lifespan, and can be dissolved due to death or withdrawal of a member (uslegal, Limited Liability Corporation Law & Legal Definition). A limited liability partnership is a general partnership that chooses to be treated as a limited liability partnership by registering with the Secretary of State. This is the method of choice by many attorneys and accountants because it shields the partners from liability, is more flexible and is given partnership tax treatment (uslegal, Limited Liability Partnership Law & Legal...
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...factors that should be considered when choosing a business entity: liability, taxation and record-keeping (Entrepreneur.com). Liability Bill and Darlene need to determine to what extent they need to be insulated from legal liability. This can depend on the kind of business they’re planning to start. A business that has a large amount of fixed assets that require hefty investments may mean the potential first year losses will be higher than expected so it would be better to limit their personal liability for the business losses. A Limited Liability Partnership (LLP), a Limited Liability Company (LLC), or a corporation can allow them to insulate their assets in the case they are found legally liable for damages. An LLC allows any entity to be owners but they offer more flexibility than a corporation. This is important if Bill and Darlene decide to grow their business and add more members since there are no limits for an LLC yet they still retain the tax advantages of a partnership with pass-through...
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...Legal Forms of Business Mike Robertson LAW531 May 7, 2012 Julie Benes Legal Forms of Business The well-informed businessperson understands choosing the correct business form is important. The type of business form determines what type of business organized, how money flows in and out of the business, how the business and owners are taxed, and the levels of risk to owners. There are several types of business forms. These types are sole proprietorship, partnership, Limited Liability Partnership (LLP), Limited Liability Company (LLC), S Corporation, franchise, and corporation. The businessperson needs to have an understanding of which business form is justified for their business startup. The beginning businessperson looks at the sole proprietorship a majority of times because of its simplicity (Anthony, 2011). A sole proprietorship is the simplest form of business organization. The owner of the business, the sole proprietor, is the business. There is no separate legal entity. Sole proprietorships are the most common form of business organization in the United States (Cheeseman, 2010). One example of a business that becomes a sole proprietorship is an independent contractor. The future business owner completes work for a business, but they are not an employee of these companies, they are considered self-employed and therefore a sole proprietor. Most person call this “moonlighting.” For example, if an electrical contractor with a full-time job also does home electrical...
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...Partnerships vs. Corporations Tracy Kamke Professor Edward Hastings ACC317 March 9, 2014 A partnership is an association owned by two or more people to carry a business or trade with each parnter contributing money, property, labor, or skill and all partners expecting to share the profits and losses. A corporation is a separate entity that has its own rights, privileges, and liabilities separate from its members. Whether you choose to be a partnership or corporation, depends on how much your federal income tax will be. There are different types of corporations and many different partnership types. There are two different types of corporations. You have the C Corporation, which has the toughest tax bracket; you are subject to double taxation. The first tax is on the company's net earnings, and the second tax is that each shareholder must pay tax on his or her dividend. A C Corporation can reduce or eliminate its federal income tax liability by distributing its income to the shareholders who perform services for the company (Battersby, 2008, p.10). The other is the S Corporation which resembles the partnership and report entities like partnerships. Partnerships are not taxable entities and are not subjected to federal income tax. In a partnership, you are required to file a Form 1065 to report the results of the partnership's business activities. There is a general partnership which is two or more partners that participate in management of...
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...The Legal System and ADR Analysis LAW/531 March 03, 2014 Traditional litigation and ADR are two different ways to resolve a legal dispute. The use of traditional litigation takes you through a costly and lengthy trial before a judge and sometimes a jury. Whereas, ADR, also known as alternative dispute resolution, (Royal & Miles LLP, 2012) is a method of resolving legal dispute without going to trial. In the case of Rainy vs. Domino’s pizza, LLC traditional litigation was used but using ADR in the case may have been the better way to go. In the state court system this case would begin by the plaintiff, Paul Rainy filing a complaint. Then Domino’s pizza, LLC has to file an answer to the plaintiff’s case, which in this case they deny being vicariously liable for the plaintiffs’ injuries. The discovery process is the next step to state court system. At this point both parties will engage in activities to discover the facts of the case from all parties’ involved as well as witnesses (Cheeseman, 2013, p.45). A deposition is one of many examples of discovery that can be used to provide detail in a legal dispute. In terms of a deposition a witness or party gives testimony pretrial, under oath, to be used as evidence during the actual trial. In the state court system the last step used before actually going to trial is a pretrial hearing or settlement conference (Cheeseman, 2013, p.47). In this pretrial hearing both parties try to facilitate a settlement before the trial to prevent...
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...RANULFO ALEJADO ACC/537 Financial Accounting Basic Accounting Concepts and Business Structures Executive Summary Most businesses nowadays either sole proprietorship, partnership or corporation should prepare financial statements in accordance with the Generally Accepted Accounting Principles (GAAP). Financial statements are the major source of financial information that would help management, creditors, and investors in their decision making. Financial reporting is one of the responsibilities of the company in communicating financial information, which guides in investment and credit decisions, assessing cash flow prospects, and about company’s resources, and claims to its resources. Accrual and cash basis of accounting are the methods employed in recording financial transactions, which affect the credibility of its financial information. Generally Accepted Accounting Principles Generally Accepted Accounting Principle (GAAP) is a helpful guide in financial reporting. For the past half a century, less than 50% of the GAAP issued are still effective today. These were reviewed and revised in accordance to the investors, and creditors information needs (Fisher, 1998). GAAP are set of standards and procedures that have substantial authoritative support. The organizations responsible in its development are the Securities and Exchange Commission (SEC), American Institute of Certified Public Accountants (AICPA), Financial Accounting Standards Board (FASB) and Government...
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...As the world changes towards 21st century, the trend in corporate law restructured when Malaysia’s major trading partners focused on the needs of small businesses. Similarly in Malaysia, a new form of business structure is required to enhance and expand business opportunities for entrepreneurs and professionals, a new form of partnership. Based on S.3(1) of Partnership Act 1961 (PA 1961), partnership is the relation which subsists between persons carrying on business in common with a view of profit. Partnership offers flexibility where its members are allowed to agree or disagree upon its arrangements. The traditional partnerships found in Malaysia are the limited partnership and the general partnership. In general partnerships, partners have unlimited liability towards the debts of the company. Unlimited liability is defined as the situation where the personal assets of the partnership's members are vulnerable since there is no legal separation between the owners and the business. Hence, the partners’ personal assets can be seized to pay the debts of their company when the company’s assets are insufficient. A general partnership cannot file bankruptcy when it possessed excessive debts, which means that the individual partners will each have to file bankruptcy to get relief from the debts. Hence, partners will try to avoid risks and it restricts the expansion and growth of the business. Others change their legal status to secure limited liability when they possess extensive...
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...Legal Forms of Business There are many forms of businesses, from the small business to the corporate business that are found all over the world. Each has its own unique properties, as well as some areas that are similar to all. In this paper, I will give scenarios of the following legal forms of business: sole proprietorship, limited liability partnership, Limited Liability Company, S corporation, franchise and corporate form. This paper will also discuss the justification as to why this business form is preferred. Sole Proprietorship. Suzie owns a shop that does body wraps that helps individuals have slimmer waists and thighs. People are wrapped like mummies and the elastic wraps are saturated in a mineral solution to help assist in breaking down fat. She owns a small shop in a strip mall downtown. A Sole Proprietorship is a business that is owned by one person, and is commonly known as a small business. It is preferred by individuals who want to start their own business because they can make all the decisions regarding payroll, hiring and firing of employees ("Doing Business as a Sole Proprietor,") Business owners of this type file their own taxes. The owner can also sell the business without the approval from others, since they own the business outright. Personal liability is also a factor when opening a business as a sole proprietor. If for example, a customer gets burned by the wraps that are used and the customer sues Suzie, she will have to hire her own attorney...
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...Constitutional Law- Supremacy Clause- “This Constitution, and the laws of the United States which shall be made in pursuance thereof…… shall be the Supreme law of the Land; and the Judges in every state shall be bound thereby …..” Article VI Judicial Review- U.S. Constitution doesn’t provide that federal courts can declare a statute unconstitutional and void, but they can./Marbury v. Madison, 1803 introduced judicial review Activism v. Restraint- Over time, not a liberal vs. conservative issue.In the early days of the New Deal, judicial activism was responsible for striking down progressive measures. Originalism v. Living- When interpreting the Constitution, ask what the people who wrote it – or wrote the amendments – understood the provisions to mean. VS. To interpret the Constitution look to the language in the document and the understanding of the framers, but do so in light of the long history of common law which preceded and followed it. That gives you a mechanism for applying the document to situations which could never have been envisioned when the Constitution was written. Public v. Private Action- Companies and individuals can’t deprive you of your Constitutional rights, only a govt can. Commerce Clause- “The Congress shall have Power ……… To regulate Commerce with foreign Nations, and among the several States …….”Article 1, Section 8 Affordable Healthcare Act- Nat. Fed. of Independent Businesses v. Sibelius (2012)/Focus: The individual mandate – a requirement...
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...Chapter 4 LEGAL RESPONSIBILITIES OF THE INDEPENDENT AUDITOR Statutory Law A. Securities Act of 1933 B. Securities Exchange Act of 1934 C. RICO Act D. Private Securities Reform Act of 1995 I. Common Law A. Clients B. Third Parties C. Burden of Proof D. 1136 Tenants Case II. Terms A. Ordinary Negligence B. Gross Negligence C. Fraud D. Joint and Several Liability E. Proportionate Liability III. Limited Liability Partnerships vs. Limited Liability Corporations 4-1 Legal Responsibilities of the Independent Auditor I. Statutory Laws - Potential legal liability as defined by the Securities Act of 1933, the Securities Exchange Act of 1934, the Rico Act of 1970, and the Private Securities Litigation Reform Act of 1995. Questions concerning the Securities Acts of 1933 and 1934. 1. Describe the general purpose of each Act. 2. How does the auditor become subjected or exposed to each Act? 3. What are the specific provisions of each Act? Include in your discussion: -Who is the plaintiff? -Who has the burden of proof? -What civil or criminal penalties are provided by the Acts? A. Securities Act of 1933 1. Regulates the initial sale of securities in interstate commerce. 2. Auditor becomes subjected...
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...CAPITALIZATION Master of Business Administration Master Business Administration for Executive (Chiang Mai) Faculty of Business Administration Chiang Mai University March, 2012 Facebook’s Capitalization Report by Thanassorn Boontarika Pinnarat Sathit Saowaluk Hathairat Ratanasirisap Pongpaew Suriyachot Chobpimai Sangkuan Yosdech Code Code Code Code Code Code 541532126 541532137 541532142 541532155 541532164 541532176 Report to Dr. Chaiwuth Tangsomchai Course work 702711 Financial Management) Master of Business Administration for Executive(Chiang Mai) Business Administration Chiang Mai University March, 2012 - - Index - Page Chapter I Introduction & Objective 1.1 Introduction 1.2 Objectives Chapter II Company 2.1 Facebook, Inc. Profile 2.2 The Corporate Mission 2.3 Executive Officer and director 2.4 Facebook’s Shareholder 2.5 Facebook Milestone 2.6 Facebook Business 2.7 Competition 2.8 Revenues Stream 2.9 Facebook Market Opportunities 2.10 Facebook Strategy 2.11 Summary of Risk Factor Chapter III Facebook Financial Report 3.1 Consolidated Balance Sheets 3.2 Consolidated Statement of Income 3.3 Basic Earning Per Share 3.4 Pro-forma Earning Per Share 3.5 Consolidated Statement of Cash Flow 3.6 Consolidated Statement of Stockholder’s Equity 3.7 Dividend Policy Chapter IV Facebook Initial Public Offerings(IPOs) 4.1 IPOs Advantage 4.2 Preparing to go to Public 4.3 Facebook IPOs 4.4 Facebook IPOs Underwriting Company 4.5 Facebook IPOs Counsel Company 4.6 Facebook...
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...LIT1: Task 310.1.5-02, 11, 13 Part A Sole Proprietorship: This form of business is the most common form of new business startup. Legal and tax issues are basic and can be followed without significant assistance from external sources. The business and owner are one in the same and all liabilities will fall upon them personally. The primary key to being a sole proprietor is the owner maintains independence in the decision making of the business and how he or she implements their business plan. LIABILITY: Individual and the business are treated in the same manner. The sole proprietor holds responsibility is for all losses and profits and has the additional responsibility of being personal liable for all actions of the business. INCOME TAXES: The sole proprietor profits are taxed as their personal income with only minimal tax incentives compared to other business models. Business profits or in the case of losses must be reported as personal income tax. LONGEVITY/CONTINUITY: Sole proprietorship can end their business at anytime without legal formalities. CONTROL: An SP business is operated as a single business owner. The control of the business cannot be given to anyone else. PROFIT RETENTION: The profits of the business belong to the owner of the business and are not shared. LOCATION: A sole proprietor is not limited to where it can operate within the United States. Only localized codes and regulations can affect where the business can be located. CONVENIENCE/BURDEN: Sole...
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...statement of Morgan Stanley for year 2010 to 2013. They are one of the world's largest diversified financial services companies since 1935, with a reputation for excellence in advice and execution on a global scale, there are in a position for positive growth. Morgan Stanley provides a wide range of investment banking, such as security transactions, investment management and wealth management services. The Firm’s employees serve clients worldwide including corporations, governments, institutions and individuals from more than 1,200 offices in 43 countries. Who are the firm’s auditors? Do they provide a clean opinion on the financial statements? • Deloitte & Touche LLP is the auditor for Morgan...
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...bepress Legal Series Year Paper Enron and the Special Purpose Entity. Use or Abuse? The Real Problem - The Real Focus Neal F. Newman Texas Wesleyan Law School This working paper is hosted by The Berkeley Electronic Press (bepress) and may not be commercially reproduced without the permission of the copyright holder. http://law.bepress.com/expresso/eps/1165 Copyright c 2006 by the author. Enron and the Special Purpose Entity. Use or Abuse? The Real Problem - The Real Focus Abstract In December of 2001, Enron Corporation filed for bankruptcy under Chapter 11 of the U.S. Bankruptcy Code; one of the largest corporate bankruptcy filings at that time. When the investigations commenced and the tangled Enron web was unraveled, it was discovered that Enron had perpetrated a very sophisticated form of accounting fraud through its repeated use of what are referred to as Special Purpose Entities (“SPEs”). In their most basic forms, SPEs are business entities formed for the purpose of conducting a well specified activity such as construction of a gas pipeline, or collection of a specific group of accounts receivable. However, because of their complex nature, SPEs can be used to manipulate a corporation’s financial results, which was the primary use for which Enron employed the SPE structure. As a result, the investment and financial community has cast a dark cloud over the special purpose entity, depicting the SPE as an inherently evil structure whose only purpose is to...
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...Energy & Resources Accounting for Emission Rights Introduction Accounting for greenhouse gas emissions remains a challenge, and market participants continue to wait for clear guidance from accounting standards setters. Formative efforts on the part of those standards setters have proven unsuccessful. The International Financial Reporting Interpretations Committee (“IFRIC”) initially took on this task, and issued IFRIC 3, Emission Rights. Unfortunately, considerable pressure from both the business community and European politicians, who objected to the financial statement consequences of applying that interpretation, led to its withdrawal by the International Accounting Standards Board (“IASB”) within a year of its issuance. In the US, the Emerging Issues Task Force (“EITF”) also attempted to address the related accounting issues in EITF Issue 03-14, Participants’ Accounting for Emissions Allowances under a “Cap and Trade” Program. However, it was never finalized, and ultimately removed from the EITF’s agenda. More recently, organizations have been advised of informal views from both the Financial Accounting Standards Board (“FASB”) and the Securities and Exchange Commission (“SEC”) on the appropriate accounting for emissions allowances held, especially since EITF 03-14 was tabled. As a consequence, many companies remain confused about the appropriate accounting treatments under both International Financial Reporting Standards (“IFRS”) and generally accepted accounting principles...
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