Week 3 Discussion 1 Partnership Entity

Topics: Taxation in the United States, Tax, S corporation Pages: 2 (665 words) Published: April 29, 2012
Week 3 Discussion 1
Partnership Entity

* Determine the key factors to be considered when deciding on forming a partnership. Factors to be considered when deciding on forming a partnership are: what type of business, type of company (DBA, LLC, LLP, Partnership, Sole prop), what kind of products, cost of starting, financing, Investors, taxes, your location, your market region, what’s your market clientele. Some other personal factors may include having common interests or concerns, understanding your partnership environment, understanding what a partnership involves, and being open to doing things differently.

* Create or retell of a situation in which the partnership entity form might be more advantageous (or disadvantageous) than operating as a Subchapter C or S corporation. Each type of corporation has its own advantages and disadvantages. A partnership advantages are: ease of formation; pass-thru treatment for tax purposes; and flexibility of ownership and allocations. The primary disadvantage is the lack of liability protection; its transparent entity is not subject to income tax. The income of a partnership is taxed on the personal returns of the partners, regardless of whether the income is distributed or retained within the entity. A Subchapter S Corporation has special tax exemption under the Internal Revenue Code. It is exempted from the Federal Corporate Income Tax and is exempt from taxation. They can elect to distribute money as profits rather than as salaries to the shareholders. Also when it comes to selling the corporation, the tax on the profits is lower for the S Corporations than for the C Corporations. The C Corporation is a corporation that qualifies for the taxes under the Sub chapter C of the Internal Revenue Code of the Internal Revenue Service, and they face double taxation. Also C Corporations can have an unlimited number of shareholders, issue all types of stocks and do not require any time frame.

* Discuss whether the...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • EDU 390 Week 1 to 3 Essay
  • ACC 290 Week 3 Discussion Questions and Responses Essay
  • ACC 291 Week 1 Discussion Questions and Responses
  • ACC 455 Week 4 Discussion Question 1 Essay
  • eco550 week 4 discussion 1 and 2 3 Research Paper
  • Discussion 1 And 2 Guide Week 3 Essay
  • FIN 550 Discussion Questions Week 1 11 1 Essay
  • MGT 498 Week 3 Discussion Questions 1 Essay

Become a StudyMode Member

Sign Up - It's Free