...To: Business Owner From: Justin Lugar Date: November 4, 2015 Subject: Business Form Recommendation It seem as though the you are looking for a couple distinct business characteristics for improving areas of concerns you have for your, so far, promising business venture. Since you are 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 only taken out at the personal level, saving you, as the owner, a substantial amount of profit. It is likely that this is one benefit you would like to keep in order to maximize your earnings. Based on the type of business you are seeking to operate I would recommend changing from the sole proprietorship to a Limited Liability Company (LLC) and I will explain why. To sum up what Http://www.referenceforbusiness.com/small/inc-mail/limited-liability-company.com states, the LLC offers the members (owners) protection from business liabilities that might be incurred. This means that they are not personally liable for paying any of the company’s debts beyond what they have invested in the company....
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...Business Structures LaGloria Williams FIN/571 April 9, 2015 Travis Hayes Every business in the world has a structure to it. It could be a small local business like a boutique or a large corporate business like a popular bank. Having a business structure to your business is what helps determine what type of ownership takes place. There are three main business structures, they are known as; sole proprietorship, partnership, and corporations. These three business structures are important to know when opening a business. This paper will describe the business structures and discussed the advantages and disadvantages that take place in each one. The first business structure is sole proprietorship. Sole proprietorship is a business that is owned by only one person. An example of a sole proprietorship business is a local floral shop; this is because it is a small business. When having sole proprietorship over a business it comes with a lot of positive and negative responsibility. It is very easy to start a small business for someone wanting sole proprietorship. The owner has complete authority of all of the decisions made for the business. The income taxes are lower than other business and easier to handle. The sole proprietor of the business also gets to keep all profits made from the business, meaning they do not have money to pay out to anyone unless there are employees of the business. The negative part of being a sole proprietor of a business is that the owner...
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...report) Forms of Business Organizations SOLE PROPRIETORSHIP A sole proprietorship is an unincorporated business entity owned by one person. A sole proprietorship is the most common form of business today. · Liability: This is one of the largest disadvantages of a sole proprietorship. There is no distinction made under law between the proprietor and the proprietorship therefore the proprietor is one hundred percent liable. In the event that the business flops or is sued the business and personal assets of the proprietor including homes, bank accounts, vehicles, and equipment will be used to pay off outstanding debts. Future earnings are included the only income that is exempt from liability are life insurance monies left by the proprietor to his/her family. · Income taxes: There is no difference under the law between a sole proprietor and the sole proprietorship, meaning that all business income is considered personal income of the proprietor. There is no double tax; all taxes are paid once by the proprietor since there is no separate reporting of federal income tax. The disadvantage to the tax situation is that the proprietors’ income from the proprietorship may cause the individual to enter a higher tax bracket and therefore pay more taxes. However a sole proprietor may decrease taxable income by writing off operating costs as expenses and most often this tax situation is advantageous. · Longevity/Continuity: It is as easy to dissolve the business as it was to start...
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...310.1.2-01-06 There are many different types of business organization’s that should be taken into consideration when going into or continuing a business venture. The organizations described below have many different quality’s that one must think about. Following will be the characteristics of each for a more thorough understanding. The details of each should be closely followed as each has its own unique pro and con that could be vital to a business. Sole Proprietorship Sole proprietorships are those not incorporated and owned by a single person. They are also the most common. They are inexpensive and easy to operate. They are great for small businesses that do not require large capital needs. All profits and losses are figured into the owners personal taxes. These advantages however do not outweigh the disadvantages. The business owner is responsible for all business debts. Sole proprietors are also personally liable if they cannot pay suppliers or somebody gets hurt in the business. If something were to happen the sole proprietor could lose everything they have to pay the debt. These are easy startups in almost any state with just a business license. When the owner retires or decides to do something else the business is finished. General Partnerships These are unincorporated partnerships where two or more co-owners carry on business for profit. Each co-owner is considered a partner. This organization is risky especially if the group of owners is large...
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...written notice of such default to the defaulting Partner. The defaulting Partner shall have fourteen (14) calendar days after such notice is sent to cure such default. If the defaulting Partner fails to timely cure such default, the Partner that is then entitled to purchase the defaulting Joint Venturer’s share in the Partner may invoke, in addition to any other remedy at law, the sale of the defaulting Joint Venturer’s interest in the Business Cooperation as stated in paragraph 9.02. 10.02 Sale Notice. Sale Notice. Notwithstanding the written offer requirement of the selling Partner in paragraph 9.02, if the defaulting Partner fails to make the required written offer to sell his interest within five (5) days after the expiration of the cure period, any non-defaulting Joint Venturer’s that is entitled to buyout the defaulting Partner may send written notice of intent to purchase the defaulting Joint Venturer’s interest in the Business Cooperation and the defaulting Partner shall complete the sale within thirty (30) days after such notice is sent. ARTICLE XI REPRESENTATIONS AND WARRANTIES 11.01 Each Business Cooperation hereby represents and warrants to each other the following matters: Each Partner has the legal power, right, capacity and authority to enter into this Agreement. However ABC COMPANY IN CHINA does have the right decisive vote in all matters in the project gathering and planning. All requisite action (corporate, trust, partnership or otherwise) has been taken...
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...have Miriam, who is a wealthy investor wanting to invest in their dream. Miriam will provide the capital with minimal participation in the business, but is wanting to profit from the business. Business Entity, Control, Taxation, Liability Since there are three individuals wanting to gain and contribute to this sports bar and restaurant the best suitable entity would be as a general partnership. A general partnership is recognized as being one in the same as its owners. Lou and Jose will be constituted as the general partnership, whereas Miriam would be known as partnership by estoppel. An estoppel is classified as one who is not permitted to deny the partnership. Control in a general partnership is based on the agreement by all partners. A general partnership only has one level of taxation, and is considered a tax-reporting entity and not a tax-paying entity. The profits that will be acquired from the sports bar and restaurant, each partner will be granted their share. Since each individual gets their amount as agreed upon, it goes into an individual account meaning that each need to report their earnings on tax forms individually. The liability that exists in a general partnership include unlimited personal liability. Each partner in a general partnership is liable for maintaining the partnership’s obligations. In the event of a law suit, joint partnership is sued as a group, and several liability individual partners are sued. There are three main rules that apply to...
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...Lit1 Task 310.1.2-01-06 Part A Determining whether to start or invest in a business endeavor and what kind of business endeavor to choose can be challenging. Through this report the numerous types of business organizations will be assessed. By the end of the report you should have a greater comprehension of the different choices available. * Sole Proprietorship: To start off it is essential to have a clear understanding of what sole proprietorship means. As the sole proprietor you are the owner and the operator of that business. In more detail, the sole proprietor manages everything including setting up the business. An attorney is only needed if the sole proprietor plans to report the name of the business under a name other than their own. In that instance they would need to register the business with the government. * Liability: A full understanding of all liability and where it falls is very important. All liability falls on the owner on the company. This means that not only all of the company’s assets but also the owner’s personal belongings possibly will be occupied in any scenario where the company fails. More specifically, in the event that the company flops because of unfortunate market settings, poor business policy or if there is an injury suffered implicated by company products. The liability falls on the owner of the company including all characteristics of the business and can be brought into any legal actions. * Income Taxes: As a sole proprietor...
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...310.1.2-01-06 There are many different types of business organization’s that should be taken into consideration when going into or continuing a business venture. The organizations described below have many different quality’s that one must think about. Following will be the characteristics of each for a more thorough understanding. The details of each should be closely followed as each has its own unique pro and con that could be vital to a business. Sole Proprietorship Sole proprietorships are those not incorporated and owned by a single person. They are also the most common. They are inexpensive and easy to operate. They are great for small businesses that do not require large capital needs. All profits and losses are figured into the owners personal taxes. These advantages however do not outweigh the disadvantages. The business owner is responsible for all business debts. Sole proprietors are also personally liable if they cannot pay suppliers or somebody gets hurt in the business. If something were to happen the sole proprietor could lose everything they have to pay the debt. These are easy startups in almost any state with just a business license. When the owner retires or decides to do something else the business is finished. General Partnerships These are unincorporated partnerships where two or more co-owners carry on business for profit. Each co-owner is considered a partner. This organization is risky especially if the group of owners is large...
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...Proprietorship BUS 311: Business Law 7 Jul 2014 Sole Proprietorship Upon the decision to start a new business, one must ask the question of what type of business entity they intend to initiate. According to Rodgers, Author of the book Essentials of Business Law, “One of the most fundamental decisions all businesspersons face in starting a business is how that business will be organized,” (2012). There are several deferent business entities to choose from. The business owner would have to weigh the different possibilities and factors such as taxes and liability to find which entity fits their intentions best. Most new small businesses options come down to a sole proprietorship, a partnership, a Corporation, or a Limited Liability Company (LLC). “For many small business, the best initial choice is either a sole proprietorship or if more than one owner is involved a partnership,” (Steingold, 2003). Even though it possesses more liability on the owner, if I were to start a new business I would have to choose sole proprietorship as my business entity. “When you start a new business, you must choose a legal format,” (Steigold, 2014). This decision will be the blue print for how the new business will operate in the years to come. As such, the new owner must weigh the benefits and the consequences, examine liability, personal time, expenses and taxation. According to Steingold (2014), it’s in the best interest of the owner to follow a checklist for starting a new business. This check list...
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...A type of business where there is no legal distinction between the business and its owner. • Liability – What a business or an owner of the business can be subject to. An owner is personally liable for the debts and or actions of the business. • Income Taxes – Because there is no distinction there is no separation of taxes between person and business. The owner is solely responsible for reporting all business income or loss on his / her personal tax return. • Longevity / Continuity – When the business owner (sole-proprietor) becomes deceased the business is stopped. There is no continuity of the business as there was only one owner. • Control – The sole proprietor is the only person in control of the business. This person is fully in control and does not have to answer to anyone. • Profit Retention – Since sole-proprietors are the sole owner of the business they keep 100% of profits. This lets the owner use the money how they see fit. • Location – A sole proprietor can choose to do business anywhere. This also gives them the option to do business in multiple locations. In my state, Florida, there are no forms required to operate a sole proprietorship however, this may not apply when choosing somewhere other than Florida to operate. • Convenience / Burden – The conveniences are there are no annual reports to file and no fees that you have to pay to the state. However, depending on the type of business, as a sole proprietor, you may still need business licenses and...
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...Legal, Social, and Economic Environments of Business Jessica L. Kuhn American Intercontinental University Abstract An inventors has an invention in which he believes will be successful, but he does not have the funding to get it to the market on his own. The three types of business: proprietorship, partnership, and corporation, their advantages and disadvantages are covered in detail in this paper, as well as a brief definition of each. Brief Interpretation of the Scenario The problem in this scenario is the individual that invented it believes that it will be of use to outside parties, but he or she does not have the money to fully finance the duplication and distribution of his or her product. The best way for him or her to get the funding and get his product out to the general public would be a partnership business, in which he would gain a better financial standing by having a second, or perhaps even third parties financial assistance Advantages and Disadvantages of Proprietorship, Partnership, and Corporation The three different types of business are sole proprietor, partnership, and corporation. Each type has its pros and cons, its positive and negative aspects. Sole proprietorship is when one person owns and runs his or her own business. Therefore, he or she is individually responsible for all moneys owed, to investors, employees, and et cetera. A sole proprietor can sell his or her business as they see fit or give it away to a family member or friend. He...
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...this paper we will compare and discuss different forms of business and their advantages and disadvantages. Following are the different type of business formed to conduct work: 1. Sole proprietorship. 2. Partnership. 3. Limited liability partnership. 4. Limited liability company. 5. S corporation. 6. Franchise. 7. Corporate. 1. Sole proprietorship, The sole proprietorship is a type of business entity that is owned and run by one individual. All the decisions of the business are made by that individual and there is no legal distinction between that individual and the business. Following are the advantages and disadvantages of Sole proprietorship Advantages They have the ability to raise capital either publicly or privately. To limit the personal liability of the officers and managers. Limit risk to investors. Sole proprietorships have the least government rules and regulations affecting it. Owners have complete control over all the aspects of his or her business. The owner can take any managerial decisions that he/ she wants to take. Disadvantages Raising capital for a proprietorship is more difficult because an unrelated investor has less peace of mind concerning the use and security of his or her investment . The investment is more difficult to formalize other types of business entities have more documentation. The enterprise may be crippled or terminated if the owner becomes ill. The business is the same legal entity as the proprietor; it ceases to...
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...Global – Contracts & Offers Professor: Tonya Floyd LAWS 310 Devry University Table of Contents Introduction…………………………………………………………………………….. 3 Definition of Contracts…………………...........................……………………………… 3 The Greenleaf Manufacturing Proposal Analysis …………………………………………. 3 The Sunrise Ltd Proposal Analysis......................…………………………………………. 4 The Groupo Embraco Proposal Analysis.......................…………………………………. 4 Pros & Cons ...……………………………...........................................................………. 5 Domestic Sourcing……………………...........................................................………. 5 Foreign Sourcing…….......………………...........................................................………. 6 Contract Liability... …………………………………………………………..………... 7 Conclusion………………………………………………………………….…………... 8 Introduction Gloria’s business is going global and many decisions need to be made in order for her to fulfill her clientele’s needs. She needs to make decisions that make sense for her and her business. We will start by providing the definition of contracts and offers in our textbook, so we can have a clear idea of what we are about to discuss next. We will explore and analyze 3 different scenarios or proposals to suggest Gloria which one makes more sense for her business and her clients. Having the opportunity to expand her business and take it to the next level is definitively a situation...
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...Legal, Social, and Economic Environments of Business Johnathon L. Olive American InterContinental University Online Abstract Johnathon Olive, the writer—was given a scenario to write about using the different types of businesses. He made a management decision regarding which business type he believed would be the most likely to succeed and why based on the scenario. He also listed advantages and disadvantages of each business type regarding the scenario. Finally, he acknowledged the issues and prior knowledge of manufacturing a new product. Legal, Social, and Economic Environments of Business Have you ever had a lot to say to a special person, but never knew exactly how to put it together in a nice, sweet conversation? I have, it’s quite frustrating—I must add. It’s the same feeling, when you come up with a great idea or invention, but you have no idea of how you should go about getting your invention up off the grown and running. This will be based off a scenario of an inventor who enjoys working around the home, cleaning, cooking, and doing minor home repairs and remodeling. You have to consider how much knowledge you have on manufacturing a product, advantages and disadvantages of each business type, and making a management decision regarding which business type you believe would be most likely to succeed and why. How much knowledge do you have on manufacturing...
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...Sole Proprietorship: A business structure in which an individual and his or her company are considered a single entity for tax and liability purposes. There is no legal distinction between the owner and the business itself. ·Liability - Seeing as there is there is no difference between a company and the owner with a sole proprietorship, the proprietor has unlimited liability, meaning the owner of the business is personally responsible for all debts, contracts, and obligations the business has. Unlimited liability puts all of the proprietors assets (home, cars, bank accounts, etc.) at risk should a lawsuit not covered by insurance arrive, or should debts go unpaid. ·Income taxes- With no legal distinction between the owner and the business, income from the business is taxed as normal personal income. Tax rates are dependent on the state, but individual income tax is by and large high. ·Longevity/ Continuity- A sole proprietorship can only have a single owner, meaning no partners can be brought into the business. Seeing as the owner is the same as the business itself, if the owner were to die, the business also dies. The assets of the business become part of his/her estate. Sole proprietorship businesses can be dissolved as quickly as they can be created; the business assets can be sold or given away. ·Control- One advantage of a sole proprietorship is that the owner of the business has a large, near total amount of control. The owner can ultimately make all decisions...
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