2-01-06/ Part: A SOLE PROPRIETORSHIP: Sole proprietorship is an unincorporated business with one owner who pays personal income tax on profits from the business. The benefit of the sole proprietorship is the tax advantage. The disadvantage of a sole proprietorship is obtaining capital funding. * Liability – As the owner of a sole proprietorship‚ one is personally liable for all business debts‚ creditors may sue you personally to satisfy the debt. * Income taxes – As a sole proprietor you
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Memorandum To: Owner From: RE: Business Type Date: October 8th‚ 2012 Changing the type of business structure is not a small consideration. You have operated for years as a Sole Proprietorship‚ but it appears that you have outgrown that particular business type and may benefit from changing to a different type of business. Based upon our previous conversation‚ I will summarize my interpretation of your business concerns in the bullets below: • Liability. You are concerned
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where both are taxed for the profits or losses. According to Bright-hub.com‚ the three most common types of Limited Liability Corporations are: Sole Proprietorships‚ which are not incorporated‚ and includes independent contractors‚ consultants‚ or freelancers. A corporation‚ which is incorporated‚ and has every form of business besides the sole proprietor‚ who is considered a separate entity and this often provides a measure of legal and financial protection for the
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business owned by a solitary individual who has unlimited liability for its debt is called a: A. corporation. B. sole proprietorship. C. general partnership. D. limited partnership. E. limited liability company. 5. A business formed by two or more individuals who each have unlimited liability for all of the firm’s business debts is called a: A. corporation. B. sole proprietorship. C. general partnership. D. limited partnership. E. limited liability company. 6. A business partner whose potential
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310.1.2: Organizational Forms Task A SOLE PROPRIETORSHIP: This is the most common form of business as it is owned by one person‚ so there is no distinction between the business and the owner. Liability – Because there is no distinction between the business and the owner‚ all liability falls on the owner/sole proprietor. If the business fails‚ both personal and business worth and assets are at risk as they are the same. Income Taxes – Filing for income taxes are an advantage as the owner
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Knowledge Check Study Guide Concepts Mastery Sole proprietorships and general partnerships Corporations Questions 100% 1 2 3 100% 4 5 6 100% 7 8 9 100% 10 11 12 100% 13 14 15 100% 16 17 18 Limited partnerships and special partnerships Score: 18 / 18 Limited liability companies and limited liability partnerships Franchising‚ licensing‚ and joint ventures Alternative forms of dispute resolution Concept: Sole proprietorships and general partnerships Mastery 100% Questions
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friend of mine and I are going to try and open a business doing accounting and bookkeeping but are having a hard time choosing if the form of business organization we will operate as will be joint stock‚ limited liability‚ partnership‚ or a sole proprietorship. A joint-stock company is where business owners raise capital by issuing stock certificates of its ownership. This means selling stock to investors that guarantee them a certain percentage of the company’s profit. This form looks good from
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Jose Rivera should select to create a corporation for his Toy Builder business. There are many reasons why it would be advantageous for Jose to create a corporation for Toy Builder as opposed to a sole proprietorship or partnership. Jose has a long desired to get into the toy business but it would be wise to separate this desire from his already acquired wealth which he has worked for so many years to accumulate. By Incorporating Toy Builder he creates a liability shield or separation between his
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form upon which to do business. Some forms of doing business are a sole proprietorship‚ partnership‚ limited liability partnership‚ limited liability company‚ S corporation‚ franchise‚ and corporation (Cheeseman‚ 2010). Sole Proprietorship A sole proprietorship is the “simplest form a business organization” because there are no formalities or the need for federal or state approval (Cheeseman‚ 2010‚ p. 530). It is composed of a sole owner who has the right to make all management decisions‚ owns all
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Study Guide 11.1 Sole Proprietorships Learning Objectives 1. Understand the importance of sole proprietorships in our economy. 2. Explore the advantages presented by doing business as a sole proprietorship. 3. Assess the disadvantages and dangers of doing business as a sole proprietorship. Key Terms And Definitions Angel Investors Affluent individuals (or groups of individuals) who provide capital to start-up and early-stage businesses. Entrepreneur A person who organizes a business and
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