LIT1 Task 310.1.2: Organizational Forms Sole Proprietorship-This is a company in which the owner and the company are basically one in the same. This is the most basic and simplest company to form. Many people use their own name or a DBA, but all liability lies with the owner. * Liability-In this form of business the owner is responsible for all actions of the company personally. There is no protection of assets or future earnings. This also includes the actions of any employees. * Income
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corporation are: sole proprietorships, partnerships and corporations. The advantages of a sole proprietorship are that is is easily and inexpensively formed; is subject to few government regulations and it’s income is not subject to corporate taxation (but is taxed as part of the proprietor’s personal income). A partnership has many many of the same advantages and disadvantages as a sole proprietorship but a partnership is more complicated with regards to liability. For example if the partnership goes bankrupt
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Act o E-courts and E-dispute resolution • Ch. 34 o Entrepreneurship o Sole proprietorship o General partnership o Limited partnership o Limited liability partnership o Limited liability company o Corporation • Ch. 35 o Limited partnerships o Special partnerships o General partners o Limited partners o Revised Uniform Limited Partnership Act (RULPA) • Ch. 36 o Corporation o Articles of incorporation o
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Sole Proprietorship- a business that is owned and operated by one person. There is no legal distinction between the business and the person. • Liability-Legally, there is no distinction between the business and the proprietor. The proprietor has complete financial responsibility for all debts incurred by the business. Thus, creditors can go after a proprietors personal assets. • • Income taxes- All income from this business form is considered personal income, and sole proprietor will report
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member LLC is also treated as a sole proprietorship for federal tax purposes. In this entity, all taxes and liabilities are solely the responsibility of the owner and the owner pays no corporate income taxes. Unlike other business entities such as a multi member LLC or corporation, if a sole proprietorship faces a lawsuit or is in debt in some manner, the business and the owner are liable for the debt. The business income is included in the personal tax return of the sole proprietor. Though there
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to gather information about what it takes to start a business. He learns it’s best to consult with a lawyer or an account about regulations, taxes, job offers and legal matters. The three different business organizations which are, sole proprietorship, partnership and corporation. Making the decision which organization would best help him succeed and serve his customers. Introduction to Business Starting a business is important to seek a lawyer or an accountant. Having knowledge on the
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business organization: • Joint-stock company • Limited liability company • Partnership • Sole proprietorship A joint-stock company is a business that is owned by shareholders. Every individual that owns a share is partial owner. Shareholders are also allowed to transfer their portion or share of the company whenever the shareholder chooses to do so. The Green Bay Packers are an example of a joint-stock company A limited liability company protects stockholders in the event of a company
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control of the company by owning 70% of the shares. Limited Liability Company A Limited Liability Company is a form of company that provides limited liability to its on owners. For example; I worked for a company that managed the buildings was called “A&V, LLC”. This was a family owned business and this type of organization help to protect their own assets in case of any law-suits filed by the tenants. Partnership Partnership is a group of skilled professionals that agree to pool
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functioning as a partnership to creating a corporation. Each of the business structures has its individual legal and tax consequences. Your business objectives will have great influence on determining the most appropriate business structure to use. Sole Proprietorship Sole proprietors have limited formalities to follow and very little guidelines to adhere to from, local, state and federal administration. Since there is only one owner, no profits have to be divided which lets a sole proprietor
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1 SOLE PROPRIETORSHIP: The owner and the business are considered one. The owner takes all the risk and receives all the profits. It is easy and inexpensive to start up a sole proprietorship however a sole owner has trouble raising capital which could limit growth. • LIABILITY –If the business fails the owner is financially responsible and my lose everything. • INCOME TAXES – The proprietor and the business are taxed together. • LONGEVITY/CONTINUITY – The business dies with the sole proprietor
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