...LIT1 Task 2 Part A: The Form | Sole Proprietorship | Description | A sole proprietorship is a type of business where there is no legal distinction between the business and its owner. This is the most common form of doing business in the United States ( Terence Lau and Lisa Johnson, 2015) | Two Advantages | There are many advantages to this type of business. First it is easy to create a sole proprietorship. The entrepreneur in charge simply starts the business. Another advantage is autonomy. The owner is able to decide what they want to do with the business, concerning hours, rules, and regulations and decide all of the factors needed to run the business. ( Terence Lau and Lisa Johnson, 2015) | Two Disadvantages | There is also some disadvantages to a Sole Proprietorship. Firstly there can only be one owner, so it is not possible to bring other in to the business. If the owner dies, then the business dies as well. Another disadvantage is raising the working capital for the business, especially to start the business. Without the capital it is difficult to expand the business and produce profits (Terence Lau and Lisa Johnson, 2015). | Liability | In a sole proprietorship the liability feature is an unlimited liability. This means that there is no different between the owner and the business, so the owner is liable for all of the debts and obligations of the business. If the owner runs into financial difficulties, he or she is personally liable to pay these finances...
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...and operated by one person. * Profit Retention – At the owner’s discretion if funds are spent or re-invested back into the company as long as debt and obligations are paid. * Location – Sole proprietors need to comply with licensing requirements in the state in which they‘re doing business as well as local regulations and zoning ordinances. * Convenience/Burden – A convenience of sole proprietorship is that the owner pays taxes on income from the business as part of his or her personal income tax payments. A sole proprietor might consider it a burden when investors hardly invest into their company. GENERAL PARTNERSHIP General Partnership is a business organization consisting of two or more persons that have entered into a contract known as articles of partnership and share profit gains as well as losses. A major advantage of general partnership is that you have someone to share equal responsibility of the...
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...Institution Date Business operations Introduction Businesses can expand and originate from various entity types. Limited or general partnerships, corporation, sole proprietorship, nonprofit organizations, Limited Liability Company (LLC), and Limited Liability Partnership (LLP) may be a few examples of the styles available for business shareholders and owners to choose from in order to carry out their business operations. Each and every style may have its own gains and setbacks as regards taxation, liability and government regulations and laws. In a bid to answer your question, I might have to make use of two different business examples which comprise of different operation styles and guidelines. The two businesses include a bar business and professional practice and may be detailed on the basis of basic requirements necessary for successful business formation. I would also be keen at outlining the entity choice for each of these businesses as a way of providing advantages over the other. A detailed explanation of how each of the two scenarios controls the taxation, liability and business issues would also be in order. To add on that, the regulations, laws and potential risks that may be involved in every business style may be identified. Bar business The best business entity choice for Miriam, Lou and Jose in their business operation could be forming a Limited Partnership. Jose and Lou would then perform the role of general partners hence manage the operations of the business on...
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...Part A (the report) SOLE PROPRIETORSHIP: This business entity is the most common business used in the United States. This entity is owned and ran by one individual where there is no legal distinction between the owner and the business. This legal name of the business is the owner’s name; however, the business may operate under a fictitious name by filing a DBA. This person is legally accountable for all elements of the business including finances, loans and debts. One of the advantages of doing business as a Sole Proprietorship is that it’s easy to create. Another key advantage is the autonomy. Since the owner or individual is the business, he or she may decide for themselves whatever business decision they feel is needed to make, including the business finances. Some disadvantages would be that it is impossible to bring in others to do business being there can only be one owner. This also makes it difficult to raise capital in terms of seeking investors. Tax planning can also be challenging for the sole proprietor. Since there is no legal distinction between the owner and the business, all the income generated by the business is treated as ordinary personal income to the owner. • Liability: Sole Proprietors have unlimited liability. There is no difference between the owner and the business. Therefore, the owner is personally liable and responsible for all the business obligations and debt. Doing so makes all of the owner’s personal assets reachable to creditors. • Income...
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...Week 7 Discussion Question The development of new product and services is the most integral part of strategic operations management of a company which the global competitive factors of the market trend has force manufacturers to develop an innovative quality product(s) with speed and efficiency for the sack of the product becoming acceptable to customer demands and universally excellent which is achieved by the help of integration of supply chain activities that brought speed and efficiency in the flow of developing processes as part of the strategic operations required for developing new product and services by taking into considerations, resource capability to create and deliver the innovative product to the expectations of the customer/consumer demands. The contribution of strategic design of operations resources can be defined as “a supply chain network with an interconnection of organizations which synchronize through upstream and downstream linkages between flow of different processes and activities which produce value in form of products and services to the ultimate customer”. Slack & Lewis (2008, p. 100) However, to better synchronized flows of information for all the innovative deliverables required for the development relationships, there exist a need to involving a supply chain partner as a third party who will help in the contribution of the operations function in the organizational activities, structured to drive project successfully to completion. Regardless...
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...have changed, owners must decide in regard to the most suitable business structure for their needs. Whether the business will be a sole proprietorship, partnership, limited liability company (LLC) or corporation, it depends on the type of business, how many owners it has, and its financial situation. There is no one choice that suits every business situation. This paper analyses several of the most important factors to be considered when deciding in regard to the business structure, including: • Potential risks and liabilities of the business • Formalities and expenses involved in establishing and maintaining the various business structures • Owners’ income tax situation, and • Capital investment needs. Also this paper provides recommendations and examples of business structures which are suitable for different ventures. Sole Proprietorship A sole proprietorship is a one-trader business, that is, an entity owned and managed by one person. The formation and structure of a sole proprietorship business can is very informal, is not subject to extended federal or state regulation, and is relatively simple to manage and control. The main characteristic of a sole proprietorship is that the owner is inseparable from the business, which gives the owner complete control over the business and its operations. Also due to this characteristic, the owner is financially and legally responsible for all debts and legal actions against the business. Another result...
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...Katelyn Bowerman 000311726 310.1.2-01-06 Part A There are many different types of business forms for your company to convert to. Below I will discuss the six types, their characteristics, advantages and disadvantages. I have concluded that there is one piece of generalized advice I can give for all of these types, and that is preparation for all owners involved, no matter the role. In the event of a death, or a decision to leave the business, you should make sure that at the forming of the business, that everything is in order for all parties involved and the smooth continuation of said business. Running a business can be an exciting endeavor, but I would recommend to anyone before they start, to have everything legally in order for all the different kinds of situations you can find yourself in. Sole Proprietorship- The simplest form of business, a sole proprietorship is the most common form of business in our country. Be it because it can be managed by a single person; or perhaps it’s the lack of agreements and formalities needed for the business to run, sole proprietorships are able to operate on a small scale and responsibilities fall on only one person. In a sole proprietorship, only one person is needed for the capital and credit to start the business, and possibly that’s why we American Dreamers have turned it into the most common form of business used in this great country. What distinguishes this form from the rest, is the unshared responsibility of the owner....
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...Organizational Forms of Business Legal issues for Business Organizations LIT1 July 23, 2012 * * * * * * * * * * * * * There are different types of business organizational structures. These structures include sole proprietorship, general partnership, limited partnership, C-Corporations, and S-Corporations. These structures each have advantages and disadvantages, depending on the particular situation or desired effects the business owners may have. It is imperative that owners understand the differences so they can choose the best organizational structure that fits their business needs. * Sole Proprietorship * One of the most common, easiest, and cost-effective organizational structures is a sole proprietorship. This form consists of one owner, and does not have any distinction between the business and the owner. Although sole proprietorships may seem less complex, it has disadvantages as well. * Sole proprietorships have several advantages and disadvantages as listed: * Liability – Sole proprietorship does not differentiate between the business and the owner. Sole proprietorships are liable for all losses. If the company were to get sued, the owner’s personal assets would also be at risk. The owner must file as a business if they are using a fictitious name; even if a company files a doing business as, also known as DBA, there is no legal separation of assets * Income Taxes – The...
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...Issue: Whether Paige and Clint had a partnership formed which would make Paige liable under the contract to buy the dairy cows from McGregor. Rules: A. Partnership is formed when 1. Joint tenancy, tenancy in common, tenancy by entireties, joint property, common property, or part ownership does not by itself establish a partnership, even if the coowners share profits made by the use of the property. 2. The sharing of gross returns does not by itself establish a partnership, even if the persons sharing them have a joint or common right or interest in property from which the returns are derived. 3. A person who receives a share of the profits of a business is presumed to be a partner in the business, unless the profits were received in payment: For services as an independent contractor or of wages or other compensation to an employee B. A purported partner may be found jointly and severally liable for certain transactions if a person by words or conduct purports to be a partner, or consents to being represented by another as a partner. Application: There is no evidence that show Paige shared in the title to the dairy farm. Also there is no evidence presented that she shared in the gross returns generated by the dairy operation or that she had a common right in the cattle. Also, Clint made no admission at trial that Paige was partner in the dairy operation. McGregor assumed that Clint and Paige were engaged in a partnership due to the fact that they worked...
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...THIS PARTNERSHIP AGREEMENT is made this __________ day of ___________, 20__, by and between the following individuals: | |Address: __________________________ | |___________________________ |City/State/ZIP:______________________ | | |Address: __________________________ | |___________________________ |City/State/ZIP:______________________ | 1. Nature of Business. The partners listed above hereby agree that they shall be considered partners in business for the following purpose: ______________________________________________________________________________ ______________________________________________________________________________ 2. Name. The partnership shall be conducted under the name of ________________ and shall maintain offices at [STREET ADDRESS], [CITY, STATE, ZIP]. 3. Day-To-Day Operation. The partners shall provide their full-time services and best efforts on behalf of the partnership. No partner shall receive a salary for services rendered to the partnership. Each partner shall have equal rights to manage and control the partnership and its business. Should there be differences between the partners concerning ordinary business matters, a decision shall be made by unanimous...
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...Part 1 Business Enterprises in China 1.0 Introduction 2.0 Proprietorships 3.0 Partnerships 4.0 Corporates 1.0 Introduction In the People’s Republic of China, business organizations may be classified in to three main classes: individual proprietorships, partnerships, and corporations. The laws that effect these forms of business enterprises are diverse. There is no single code or statute that governs the PRC law of business enterprises. According to the sources of capital, there are domestic capital enterprises which are regulated by Sole Proprietorship Enterprise Law of the People's Republic of China , Partnership Business Law of the People's Republic of China, and Company Law of the People's Republic of China and foreign capital enterprises which are regulated by The Measures for Administration of the Establishment of the Partnership by Foreign Enterprises or Individuals within the Territory of China, Law of the People’s Republic of China on Chinese-Foreign Con-Tractual Joint Venture, Law of the People’s Republic of China on Chinese-Foreign Equity Joint Ventures, and Law of the People’s Republic of China on Foreign – Capital Enterprises. The relevant laws are the Security Law , the Fair Competition Law and the Antitrust Law. 2.0 Proprietorships 2.1What is a sole proprietorship enterprise A sole proprietorship enterprise means a business entity established within China with its capital contributed by one individual and its assts owned personally by the sole proprietor...
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...partners achieve active management control over the prawn farm’s operations? III. Analysis Based on the composition of the members of the partnership, it could be inferred that it is a general partnership, specifically a family partnership, as all of them are related. There were no formal or clear delineation of each partners’ roles and responsibilities in the venture, aside from the fact that Ben Torres acts as the operations manager and the other member are the non-resident partners based in Cebu, who contributed Php 25,000 each. Because the farm is located in Zamboanga, the other three members rely on Ben for the necessary updates and financial reports. However, instead of updating his partners and consulting them for decision making, Ben took the liberty of deciding and making transactions without the knowledge and approval of his partners. Probing the financial reports, Ben’s decisions clearly did not bring profits to the business, but entailed additional financing from the other partners. With this set-up, the non-resident partners bear much of the risk of the business, while Ben gets to have more control. Furthermore, despite limited resources, it was found that there was an excess prawn feed supply in inventory from the second cropping, which raises a red flag in terms of cost and production efficiency. IV. Recommendation Taking into account the issues found, the consultant suggests to draft a partnership agreement as a form of checks and balances that would...
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...Task 310.1.2-01-06 1. Sole Proprietorship - A sole proprietorship is any business that is owned and ran by the same individual. There is not a difference between the owner and the business. The owner IS the business. The advantages of this include the owner retaining all profits and being in direct control of all elements of the business. The disadvantages of this are that the owner is entirely responsible for debts, loans, losses, and this form of business cannot include a partner or co-owner. Liability: Since the owner IS the business, liability is unlimited for the owner. They are responsible for all debts. This also puts personal assets in line of creditors. A sole proprietor could get wiped out with one large personal lawsuit and lose everything. Income taxes: Taxes for the business are processed as the owner's personal business, which is usually higher compared to other business tax rates. Longevity: This is based on initial work done by the owner when the business is started. It can depend on how the owner finances the business. Typical funding for this type of business is just a personal loan. Control: Owner is 100% in control of everything with the business and does not have to consult with anyone else prior to making important decisions Profit retention: Since the owner retains 100% of the profits, the returns on investments can be whatever the owner wishes at any given time. The owner can retain an entires months profits for investment purposes...
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...a business founded on friendship.” [ (Rockfellar) ] Partnerships are defined as the relationship existing between two or more persons who join to carry on a trade or business. Each person contributes money, property, labor or skill, and expects to share in the profits and losses of the business. [ (IRS) ]. There are two different type of partnerships limited, and general. Domestic Corporation is defined as a U.S. corporation doing business in the state in which it is incorporated opposite of foreign corporation [ (Answers.com) ] Partnerships John D Rockefeller stated that partnership is “A friendship founded on business is better than a business founded on friendship, but 70% of business partnerships fail (according to Harvard Business School); the fastest way for a business to succeed is to ignore the dynamics between yourself and the other partners. According to the National Center for State Courts, there were a whopping 14,957,085 civil suits filed in 2001 and that number is increasing every year. The shocking statistic is more than $200 billion dollars a year are poured into fending off litigation [ (National Center for State Courts) ]. Partnerships are used to minimize the disadvantages of a sole proprietorship and maximize the advantages of having more than one owner. Most states have a model law governing partnerships based on the uniform partnership act [ (Ferrell, Hirt, & Ferrell, 2009) ]. Partnerships are typically larger than sole proprietorships but smaller...
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...Entity, Control, Taxation, Liability Since there are three individuals wanting to gain and contribute to this sports bar and restaurant the best suitable entity would be as a general partnership. A general partnership is recognized as being one in the same as its owners. Lou and Jose will be constituted as the general partnership, whereas Miriam would be known as partnership by estoppel. An estoppel is classified as one who is not permitted to deny the partnership. Control in a general partnership is based on the agreement by all partners. A general partnership only has one level of taxation, and is considered a tax-reporting entity and not a tax-paying entity. The profits that will be acquired from the sports bar and restaurant, each partner will be granted their share. Since each individual gets their amount as agreed upon, it goes into an individual account meaning that each need to report their earnings on tax forms individually. The liability that exists in a general partnership include unlimited personal liability. Each partner in a general partnership is liable for maintaining the partnership’s obligations. In the event of a law suit, joint partnership is sued as a group, and several liability individual partners are sued. There are three main rules that apply to a general partnership; each partner is liable for their own actions, actions...
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