Sole proprietorship: Is the simplest and most common business structure. There is no legal distinction between the proprietor and the business, which means it is autonomous. You are entitled to all profits and responsible for all your business's losses and liabilities. Liability- This falls directly on the owner. All debts, liabilities and losses fall on the owner. The owner's assets can be used to alleviate the business's debt. Income taxes- All income generated through a sole proprietorship is taxed by the Internal Revenue Service. This is reported on the owner's personal tax return. Longevity/Continuity- A sole proprietorship exits only as long as the owner is alive or until the owner decides to Control- Control is shared by the company's shareholders and a board of directors. A annual meeting has to be held along with records of said meetings. Profit retention- Profit is given to the shareholders through dividends. Location- There are several state and federal filings for the location of a corporation. Convenience/Burden- With a corporation funding and financing can come easily by selling stock or credit. A corporation also has a long life span. A downfall is that it is very complicated to run a corporation and there are a lot more expenses involved. Also has a double taxation.
S-Corporation: This is similar to a C-corporation in profit and liability. The differences are that there is no dual taxation but they must meet certain requirements. A s-corporation can only have a certain number of shareholders and can have only one class of stock. Liability- Similar to a C-corp, the corporation is liable for debts and obligations. Income taxes- The owners and shareholders pay taxes on the income produced by the business. Longevity/Continuity- Same as a C-corp, a S-corp can have a long life span and see many different executives. Control- Shareholders select a board of directors and they elect officers to run the company. Shareholders of a S-corp must be United States citizens. Profit retention- Profit is divided up to
LIT1 Task 1 Part A SOLE PROPRIETORSHIP Sole proprietorship is the most common form of business in the United States. A sole proprietorship is a business that is owned by one person. Sole proprietorships have the following characteristics: 1. LIABILITY- There is no difference between the belongings of the business and the business owner. The business owner can use his/her personal money or business money to pay off any debts whether they are personal or business related. Therefore, sole proprietorship…
Legal Issues in Business Organizations Task 1 Zachary Christenson Western Governors University 000447824 Family and Medical Leave Act Situation The Family and Medical Leave Act of 1993 (FMLA) was created to help assist employees deal with the difficulties of home, while creating an atmosphere of job security. The FMLA also helps cover employers from wrongful use of the FMLA by the employees. Although the document is extensive, there are three major provisions of the FMLA that apply to the…
LIT1 – Task 1 (Part A) Sole Proprietorship: * Single Ownership - The single individual always owns sole proprietorship form of the business. The individual owns all assets and properties of the business and bears the risk of losing or gaining from the business. * No Sharing of Profit – The business is owned by an individual, therefore, all of the gains are directly available for the owner to access immediately. There is no friction between owners * One Man’s Control - The controlling…
LIT1: Task 310.1.2-01-06 Task A Sole proprietorship 1. Liability * An owner has unlimited liability both personally and as the company owner. Liability is a disadvantage in a sole proprietorship. 2. Income taxes * The owner is responsible for filing taxes and is allowed to file taxes as part of their personal income taxes. 3. Longevity * This depends completely on the owner and there continued ability to operate the business. The operation of the business can be significantly…