Sole proprietorship

bushel proprietorship Sole Proprietorship A sole proprietorship is a business owned by a single person.Advantages of the Sole Proprietorship A. SimplicityB. AutonomyC. Sole GainD. Single TaxE. Shelter IncomeDisadvantages of the Sole ProprietorshipA. Limited resourcesB. Un bound and Unsh ared Liability tombstone Characteristics A. Liability-Liability is totally the sole proprietors. Meaning that there is no difference between the sole proprietor business and personal as pieces they are one and if the business fails or the sole proprietor is sued the creditors and litigants bum come after both as if they are one. B. Income Taxes-The sole proprietor and the business are evaluateationed as one. C. higher status or Continuity of the Organization-If the sole proprietor dies the business goes with him.D. Control-The sole proprietor controls everything in the business. He and/or she can do it all their own of hire someone else to do it.E. advance Retention-The sole proprietor keeps a ll of the kaleF. stratagem of Burden-There are only a few instances when you devour to have a exhibit with the state or federal government. When you run a business under a different name then your own or you supply certain things that require licensure. General Partnership By definition, is when two or more people come together to run a business. Advantages A. Partners keep all the profit.B. The federation is free from Federal income tax.C. Partnerships profits or losses pass directly to the partners as personal income for federal tax purposes.D. Partnerships permit pooling of capital, talent and a overlap of risk. Disadvantages A. The death of a partner may automatically end the union-with serious consequences to all concerned.B. Un curb personal liability of all the partners. Key Characteristics A. Liability-The partnership has outright personal liability.B. Income Taxes-There is no Federal tax for the partnership, but they can claim their profits and their losses on the ir personal taxes.C. Longevity -The longevity of the business is establish on the contract they had drawn up before the business was started in case of buyout and/or Death.D. Control-The control of the business is based on what the partners agree on.E. Profit Retention-All the profits go to the partners.F. Convenience or Burden-The partnership should have a contract drawn up that describes exactly what each partner has contributited to the business, what share of the profits each partner volition receive, duration of the partnership and the breaking up and closing of the business in case circumstances arise. If this is done then a partnership would be a good venture. Limited Partnerships By definition, the limited partnership is at least one limited partner and at least one general partner. Advantages A. The limited partner can make a profit without much effort.B. If the company fails, the limited partner only losses the come up they had invested. Disadvantages A. The limited par tner has a very limited control in the running of the business.B. It is very hard for the limited partner to get there investment out of a limited partnership. Key Characteristics A. Liability-The majority of the liability is taken on by the general partners non the limited partners.B. Income Taxes-If the partnership has two or more of the following things then it will be taxed as a weedFreely transferable ownership papersContinuing of life club of limited partners in management of the businessVery limited liability of the limited partner in the debt of the business if it goes depository financial institutionrupt (All Business, 2010) (All Business, 2010)C. Longevity-The longevity of the limited partnership is based solely on the contracts drawn up.D. Profit retention-The limited partner gets a percentage of the profits.E. Convenience or Burden-The limited partnership is best for the limited partner if they want to use it as an investment tool. C Corporation By definition, the C corporation means closely held corporation. They are small no(prenominal) traded corporations, usually but not always limited to no more than 30 shareholders. Advantages A. The closely held corporation is its own legal entity, as long as all the rules and bylaws are followed at the local, state, and/or federal level then there is limited liability.B. Closely held corporations can have benefit health plans, which will be better retirement and health insurance plans then those of non-corporation businesses.C. The health insurance is fully deductible and up to a certain amount of sort term life insurance benefits per employee.D. Should a shareholder die or wish to cash out his or her shares, the corporation will still continue.E. It is a lot easier to get investment capital in a corporation then it is in new(prenominal) businesses.F. Employees can be offered stress option plans. Disadvantages A. two-baser taxed. Which means after the corporation pays its taxes on the income the corporation makes, the shareholder will be taxed again on the profits they receive from their profits on their shares.B. You essentialiness follow the local, state and/or federal laws when it comes to incorporating to the letter. If they are not followed then the shareholders may be held liable for any situation that comes along.C. It costs more to have a corporation than any non-corporation business.D. It takes more time and effort to maintain a corporation then a non-corporation. Key Characteristics A. Liability -As long as all the local, state and/or federal laws are followed then there is very limited liability.B. Income Taxes-A C-corporation is what is called double taxed. Meaning once the corporation pays the business tax then any profits the shareholders make are then taxed again.C. Longevity -The only way a C-corporation can be dissolved is if it is voted on and hold to by the shareholders and very careful check of rules are followed. It doesnt matter if a shareholder di es or cashs in their shares the corporation continues.D. Control-A c corporation usually has a president, vice president and secretary-treasurer. Anyone or all of those people control the corporation.E. Profit retention-The closely held corporations profit depends on what percentage of personal credit line each shareholder holds.F. Convenience or Burden-In order to form a c-corporation there has to be different local, state and/or federal law that must be followed and certain things that must be done to incorporate the business. S Corporation By definition, the S Corporation means Subchapter S Corporation, it comes from the tax code from which it is taxed. An s-corporation is limited to no more than one hundred shareholders. Advantages A. Since the corporate losses are passed thru to the shareholders, they are able to take is as a loss on their taxes.B. You will have limited personal liability without having to pay high corporate taxes.C. It is a lot easier to get investment capi tal in a corporation then it is in other businesses. Disadvantages A. There are a lot of rules to follow and the amount of shareholders is limited. B. It will be costly to set up and follow the rigid set of corporate rules and laws.C. There will be close scrutiny by the I.R.S.D. All shareholders must be U.S. citizens.E. All shareholders must vote for the S corp.F. The corporation cant deduct the benefits like health and or accident insurance. Key Characteristics A. Liability-the shareholder is only liable for the debts the corporation has up to how much they have invested. Exceptions take on 1. If the shareholder guarantees a business loan.2. If it is ruled by the courts that the business is a scam.B. Income Tax-S corporations are corporations that elect to pass corporate income, losses, deductions and credit through to their shareholders for federal tax purposes. Shareholders of S corporations report the flow-through of income and losses on their personal tax returns and are asses sed tax at their individual income tax rates. This allows S corporations to avoid double gross on the corporate income. S corporations are responsible for tax on certain built-in gains and passive income.C. Longevity-The S corporation is a perpetual entity and is not affected by the death of a shareholder.D. Control-The shareholders, the board of directors and the officers of the corporation all control the corporation.E. Profit Retention-In an S corporation all Officers, the Board of Directors and shareholder-employees must be paid a reasonable salary from the corporate earnings.F. Convenience or burden-Many rules and regulations must by follow the corporation, including the number of shareholders. Also, it can be costly to set and follow corporate formalities.LLCBy definition, an LLC means Limited Liability Company. It is a business that brings a partnership and a corporation together. Advantages A. LLCs offer pass-through tax statues standardised to that of a partnership.B. Cor porations are required to hold meetings and record minutes on those meetings each year LLCs are not. The amount of paperwork needed to purchase assets, open bank accounts or make changes within the company is besides significantly reduced in an LLC.C. LLCs provide owners with a degree of liability protection, such as also provided by a C corporation. Owners of both C Corporations and LLCs are typically not responsible for the debts and liabilities of the business. Disadvantages A. Many investors will not invest in LLCs, because its a business structure that is not understood.B. LLCs dont have employee stock option plans.C. You cant switch from an LLC to a C or S corporation like you can switch from a C to S corporation.D. Some states dont allow single-member LLCs. Key Characteristics A. Liability-LLCs are not personally responsible for debts of the business. B. Income tax-LLCs are taxed at the personal level. C. Longevity or continuity of the organization-Operating agreement can r equire a number to obtain interest beyond transferring interest.D. Control-persons and other legal entities composed of persons (such as trusts and other corporations can have the right to vote or receive dividends once declared by the board of directors. In case of for-profit corporations, these voters hold shares or stock and are thus called shareholders or stockholders. When no stockholders exist, a corporation has members who have the right to vote on its operations. Voting members are not the only members of a corporation. The members of a non-stock corporation are identified in the Articles of incorporation and the titles of the member classes may include Trustee, Active, Associate, and /or Honorary. However, each of these listed in the Articles of Incorporation are members or the corporation.E. Profit retention-Members share in the profit are proportion to how they invested in the business.F. Convenience or burden-LLCs dont allow single member companies, LLCs arent conducive to employee stock option plans and Investors will not invest in LLCs. (Haus, 2011) (All Business, 2010) (All Business, 2010) (All Business, 2010) (All Business, 2010)