You Are an Entrepreneur! ACC 557 Abstract Being a full time working mom with a house, husband and grad school to attend to, it does not give me a great deal of free time to pursue my lifetime goal of opening up my own day care center. Today, I have decided to turn that goal into a business finally with the support of my friends and family. However, I do need to obtain start-up capital from a lender or from an investor. My goal is to properly convince the lender or investor
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Introduction The future design of a company is not always thought about when deciding which entity a business should be. In the case of Acme fireworks, the owner, who we will call Jim, never anticipated his business would be more than a sole proprietorship. As his business grows, so does his liability as well as his taxes. It is time for Jim to change entities. His best bet would be to form an LLC. “The advantages of forming an LLC are that the members are afforded limited liability and have pass-through
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statements, which are defined in the following tables. A sole proprietorship involves a “self-employed individual who operates a trade or business wherein all of the tax consequences fall to that proprietor, including all liabilities, debts, profits and losses” (Choice of Business Entities, 2001). Small owner-operated businesses such as towing companies, independent restaurants, and nail salons are often sole proprietorships. [pic] Another form of business entity is a partnership
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now operating in a sole proprietorship, which allows business and personal finances to be one in the same, one worry is not having enough liability coverage to protect your personal assets/finances in unforeseeable lawsuits. Another concern is the being able to raise enough investments in capital assets to be capable of expanding your business. Right now you are not being double taxed, meaning at the corporate level as well as the personal level. Since there is a sole proprietorship going on taxes are
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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
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the owner of business to evaluate implications of legalities and tax related to his or her business forms. The purpose of this paper is to define the advantages and disadvantages of the four different forms of business organization, including sole proprietorship, partnership, C corporation, and S corporation. The paper will define the different types of financial statements associated with each form of business organization. The paper will also define the consequences of Tax implications, Legal implications
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Sole Proprietorship: There is no legal difference between the Sole Proprietorship and the owner. They are easy to create and can mature as quickly or slowly as the owner wants. There can only be one owner and raising capital can be difficult, so they seek funding from financial institutions. ● Liability The Sole Proprietor is personally responsible for all debts and obligations. Creditors can claim personal assets of business owners and can sue if there is a breach of contract. Income Taxes
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partnership for the exercise of a profession civil Code of the Philippines, article 1767). An association of two or more persons to carry on, as co-owners, a business for profit (Uniform Partnership Act, section 6). Partnerships resemble sole proprietorships, except that there are two or more owners of the business. Each owner is called a partner. Partnerships are often formed to bring together various talents and knowledge or to bring needed capital into a business. Partnerships are generally
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and Hopson (2014) “Usually, concerns over minimizing personal liability, reducing taxes, or becoming more tax efficient drive a business owner’s decision to change the way a company does business.” The options for your type of entity include sole proprietorships, public held corporations, private held corporations, limited liability corporations (LLC), franchises and limited partnerships (LLP). Each type of business runs the risk of being sued for numerous reasons. However, the type of business you
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business environment brings a lot of challenges and opportunities for new businesses. An entrepreneur that starts a business must decide the legal form under which the new company will operate. The major forms of business organizations are: sole proprietorship, partnership, general partnership, limited partnership, limited liability partnerships, limited liability company, and corporation or under other available legal business forms (Cheeseman, 2010). The choice could become a critical factor of
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