Premium Essay

Lit1 Wgu Task a

In: Business and Management

Submitted By COWGUSER
Words 4431
Pages 18
LIT1 Task 1 Part A (the report)

SOLE PROPRIETORSHIP: A sole proprietorship is the simplest, quickest and cheapest form of business to start making it the most popular types for first time business owners. A business owner and a sole proprietor may operate under different names, but legally, they are the same entity. Which leads to one of the biggest disadvantages of becoming a sole proprietor; the owner is responsible for all debts and fault created by the business. One of the major advantages to starting a sole proprietorship is the simplicity behind the formation. There is very little paperwork that needs to be filed at the inception and it takes very little work to keep the business compliant with state and federal laws. Another advantage to a sole proprietorship is taxes. Any money made by a sole proprietor is considered income to the owner. The profit is claimed as income on the owner’s annual tax filings. * Liability: Because there is no legal separation between an owner and the business in a sole proprietorship, the business owner is unlimitedly liable for any debt or fault of the business. Even if the sole proprietorship dissolves, the owner will be liable for the debt. If the debt is not taken care of in a timely manner it will could affect the owner’s credit rating and lead to future earnings being garnished. * Income Taxes: Taxation of a sole proprietorship happens once, at the income level of the owner. Any profit made by the company is considered an income to the owner. A sole proprietor is considered by the internal revenue service as self-employed, meaning the sole proprietor will not be held liable for FICA taxes. However, as the owner you will pay 100% of the self-employment tax (SECA). The annual contribution to the Self-Employment Contribution Act tax is deductible up to 50%. * Continuity: Because a sole proprietor is the…...

Similar Documents

Premium Essay

Lit1 Task 310.1.5-02

...LIT1 – Task 2 – Labor and Employment Law Company X vs. Employee A on FMLA payment (Situation A) .Relevant Facts: Employee A has a 2 year tenure with Company X. Employee A asked for and was granted FMLA for the birth of his twins. Employee A asked to return to work before the allotted twelve week period had expired. On his return, he also requested for payment of his salary during his eleven week period of FMLA. His request for an early return was granted, but his time on FMLA remains unpaid. Employee A is now in an appeals process. Family Medical Leave Act applied The Family Medical Leave Act of 1993 states that as long as an employee meets the requirements of working at least 1,250 hours or twelve months, the employee has the right to take FMLA and resume employment at the end of the allotted twelve week interval. The employee will not be compensated for the time while on FMLA. (Wage, 2010) Report and final ruling No violation has occurred as Employee A`s FMLA time will remain unpaid and Company X abided by the Family Medical Leave Act of 1993 accordingly. Company X vs. Employee B on Age Discrimination (Situation B) Relevant Facts: Employee B is 68 yrs old and has a 42 year tenure with Company X. Employee B has recently received an above average performance evaluation and was hoping to get a promotion. The promotion was give to a 32 years old colleague who received an adequate performance evaluation. Employee B is accusing Company X of age employment......

Words: 878 - Pages: 4

Premium Essay

Lit1 Task 1 Part a

...Running Head: LIT1: Legal Issues for Bus.Org Task 1 PART A Sole Proprietorship: Is one of the most popular business types in the U.S and also one of the simplest. There is no legal distinction between the proprietor and the business which means it is autonomous. Autonomy can be very beneficial in that it allows for creative expression, freedom and control but also allows for limitless liability for the owner. Liability: Because the business and the owner are one in the same the liability falls completely on the owner. All forms of a business owner’s assets are available to cover business debts. * Income Taxes: All net income from a Sole Proprietor’s company is taxed as personal income. * Longevity/Continuity: Since this business type is autonomous it can only have one owner. Also the business cannot be sold to someone else. * Control: This business type is controlled by the sole. * Profit Retention: The profit earned from a sole proprietorship is all personal. * Location: The simplicity of this business type allows one to be created wherever the business owner is. * Convenience/Burden: The convenience of a Sole Proprietorship is that it can be created just by starting to do business. The burdens can be the lack of other people to help in the ownership of the business. General Partnership: A General Partnership is similar to a Sole Proprietorship in that it still is not a separate legal entity. A General Partnership is formed when two or more...

Words: 1136 - Pages: 5

Premium Essay

Lit1 Task 1 Wgu Stody Guide

...LIT 1 – Task 1 | SUBDOMAIN 310.1 - BUSINESS LAW | Competency 310.1.2: Organizational Forms | | | | The following report will summarize the key differences between the various forms of legal business entities. The ownership forms covered will include sole proprietorship, general partnership, limited partnership, C-corporation, S-corporation, and Limited Liability Company. Also included will be a brief recommendation of the most appropriate form of ownership for the given manufacturing business. | Section A- For each of the various forms of business ownership, a brief description outlining the basic impact on the following criteria will be given; * Liability * Income Taxes * Longevity or continuity of the organization * Control * Profit Retention * Location * Convenience or burden Sole Proprietorship Perhaps the most common form of business ownership, sole proprietorship, is generally the simplest form of business ownership due to the lack of separation between the entity and the individual. While there are positive and negative implications to any form of business ownership, these are generally more exaggerated in the instance of sole proprietorship. The ease of formation and ownership and limited regulation are strong benefits, however, the negative aspects are far greater than in any other form of ownership. The first negative ramification is the lack of ability to continue the company after the owner either becomes unable......

Words: 2050 - Pages: 9

Premium Essay

Lit1 Task 1 a Wgu

...LIT1 Task A SOLE PROPRIETORSHIP: •         LIABILITY – The owner and the business are considered as one and so the owner has unlimited liability for the business. Therefore the all of the owner’s personal assets, the business’s assets and the business’s future earnings may be at risk. •         INCOME TAXES – All income for the business goes on the owner’s personal income tax returns whether federal, state or local. One advantage of the sole proprietorship is that the business is not a separate entity and therefore is only taxed once on this income, and another advantage is that all business liabilities may be written off as expenses to offset income. Asset depreciation is an example of this. •         LONGEVITY/CONTINUITY – Once the business owner dies, the business is discontinued. He may will the assets of the business to someone else who is then required to create a new entity. •         CONTROL – The Owner has complete control of the business. He can make decisions without having to consult a partner or shareholders. The business owner may assign an employee to make decisions as well. •         PROFIT RETENTION – The Owner keeps all profits from the business and is subject to all losses. Therefore, the owner is allowed to not only recoup his investment into the business, but is also allowed to keep all profits from the business to spend or save as he wishes. •         LOCATION – The owner can simply decide to operate in another state, but must comply with......

Words: 2297 - Pages: 10

Premium Essay

Wgu Lit1 Task 3

...Student I.D. E-Mail: Western Governors University LIT1: Task 310.1.5-02, 11, 13 Situation A: The employee’s FMLA right was satisfied when he was granted the leave by the company. The employee has been employed at the company for two years prior to his request, which clearly fulfills the requirement of working a total of twelve months before the leave must be granted by the company, which employees more than fifty employees. The request for leave was for birth care, which is a valid reason to request FMLA. All of the applicable provisions of the FMLA were adequately met for this particular employee. FMLA grants twelve weeks of unpaid time off and guarantees that the employee will then be able to return to the same job at the same rate of pay. FMLA provisions do not require paid time off as a mandatory action for the company; therefore, the employee cannot expect the company to pay eleven weeks of withheld salary and the company has not violated any FMLA rules by denying that specific request. Situation B: It is apparent the 68-year-old employee is performing his work duties adequately. The employee has an above average rating; therefore, it cannot be argued that his age is affecting his quality of work.  Nothing to suggests that his work does not meet the standards of the company.  This is an example of why the Age Discrimination Act of 1967 is so important and necessary. This given situation is an obvious violation of the Act.   The employee is......

Words: 488 - Pages: 2

Premium Essay

Wgu Lit1 Task 1

...required. LLCs dissolve when a member dies or undergoes bankruptcy. Running a sole-proprietorship or partnership will have less paperwork and complexity. An LLC can be classified as a sole-proprietorship, partnership, or corporation for federal tax purposes.   Work Cited Page Bliss Business and Community Development. (n.d.). Retrieved November 17, 2014, from How Businesses Are Taxed. (n.d.). Retrieved November 17, 2014, from The Criteria That Determine Corporations. (n.d.). Retrieved November 17, 2014, from WGU - LIT1 - Template flashcards | Quizlet. (n.d.). Retrieved November 17, 2014, from The memorandum TO: Clients and Friends of the Firm FROM: Nikki Lingo RE: SEC Rule 65243 DATE: November 24, 2014 _____________________________________________________________________ __ I would recommend that an S-Corporation form of business be used in your given situation. By choosing this type of corporation its shareholders are used to pass corporate credit, losses, deductions and income. This is specifically for federal tax purposes. The owner which is you will not be responsible for reporting such losses and income. This is the company shareholders job. They must report such information on their personal tax returns. By choosing......

Words: 3434 - Pages: 14

Free Essay

Wgu Lit1 Task2

...Western Governers University LIT1: Task 310.1.5 - 02 11 13 Situation A: The Family Medical Leave act of 1993 states that any employee who has been with the company for 12 months qualifies for job and salary protection as long as the company has at least 50 employees in a 200 mile radius. Since Company X employs 75 people it must meet the follow FMLA policy. Employee A qualifies for FMLA job protection since he has been with the company for 2 years prior to his qualifying family event. Birth and medical complications leading up to it are qualified reasons to request FMLA however, the act states employees may take up to 12 weeks of unpaid leave. There is no requirement under FMLA that leave be paid, any compensation to the employee during their leave is a voluntary act by the employer. Therefore, the denial for his 11 weeks pay is not a violation of FMLA. The managers actions were appropriate and with in the law. Situation B: The Age Discrimination in Employment Act of 1967 prohibits discrimination against employees 40 years of age or older. Given the glowing performance review of the 67 year old employee that was turned down for the promotion it is apparent that age discrimination was probably in effect. The violation possibility is amplified by the fact that the 38 year old promoted person was much younger and had a lower performance review. This employee could report or sue the company for ADEA violation. Situation C: The company has violated Title I of the......

Words: 464 - Pages: 2

Free Essay

Lit1 Task #2

...Jed Worthington LIT1: Task 2 Situation A: Our company had an employee whose wife gave birth to twins prematurely. This employee requested leave in order to be with his wife. This particular situation fell under the Family and Medical Leave Act of 1993; it states that employers must grant 12 weeks during any 12 month period of time of leave to employees. An employee can qualify for the Family and Medical Leave Act when there is a birth of a child, placement of a child in foster care, adoption, or to care for immediate family members because of health conditions. It can also be used for the employee’s own health reasons. The law states that the employer needs to compensate the employee for any paid leave the company provides to its employees. If the company does not provide paid leave for their employees, then the leave does not need to be paid. In the situation, we followed the FMLA laws by allowing the employee to take a leave. We then brought the employee back to his previous job and rate of pay after his return. The company has no obligation to compensate the employee for his 11 weeks of leave, unless the company provides 11 weeks of paid leave to its employees. Situation B: An employee was denied a job based on his age. This particular situation would fall under the Age Discrimination Employment act of 1967. This law states that companies that employ 20 or more employees must not discriminate against any individual from the age 40 years and older. The......

Words: 684 - Pages: 3

Premium Essay

Lit1 Task 2

...Running head: LIT1 TASK 310.1.5-02, 11, 13 LIT1 Task 310.1.5-02, 11, 13 Western Governors University 1 LIT1 TASK 310.1.5-02, 11, 13 2 LIT1 Task 310.1.5-2, 11, 13 Situation A The Family and Medical Leave Act of 1993 (FMLA) contains several important provisions that are applicable and will be considered in Situation A. I have outlined these provisions below. First, according to U.S. Department of Labor, Wage and Hour Division, Fact Sheet #28 (U.S. Department of Labor, Wage and Hour Division, 2010), the FMLA applies to public employees such as state and local governments, some federal employees, and all private-sector employees. Since Company X is a private organization, it falls within the bounds of this act. Second, the act specifies a private-sector entity that employs more than 50 employees is subject to its regulation (U.S. Department of Labor, Wage and Hour Division, 2010). Company X currently serves as an employer for more than 75 workers and therefore its employees may utilize the benefits of the FMLA. Third, the employer must grant an eligible employee up to a total of 12 workweeks of unpaid leave during any 12-month period for one or more of the following reasons:  for the birth and care of a newborn child of the employee;  for placement with the employee of a son or daughter for adoption or foster care;  to care for a spouse, son, daughter, or parent with a serious health condition;  to take medical leave...

Words: 1272 - Pages: 6

Premium Essay

Lit1 Task 1

...September 15, 2014 Lauren Tierman Western Governors University Student ID: LIT1 Task 1 –Labor and Employment Law Situation A: Details * Employee A has been with Company X for two years. Employee A was given leave in order to be with their spouse and newborn. * Employee A took FMLA leave for 11 weeks. Upon returning to work, the employee wants to be paid for the time they took the leave. The previous department manager left the company during Employee A’s leave. * The new manager has agreed to place employee A in an equivalent position and pay but will not pay the employee for the 11 weeks of leave. Key Provisions and Outcome The Family Medical Leave Act refers to public and private companies, and companies that have 50 employees or more. The FMLA states that employers must give an eligible employee up to 12 weeks of unpaid leave each year. (Perez/ Department of Labor, n,d.). In this situation employee A worked at company X which has over 75 employees and took 11 of his allowable 12 weeks in accordance to FMLA. In accordance to FMLA, an employee must have worked for their employer for 12 months and must have worked 1250 hours. The employee can take FMLA for the birth and subsequent care of a newborn child. (Perez/ Department of Labor, n,d.). In this situation employee A had just recently experienced the birth of a newborn child and worked at Company X for two years. The FMLA allows for employers to......

Words: 964 - Pages: 4

Premium Essay

Wgu Lit1 Task 1 310.1.5

...2011). Taking into account the information provided in Situation C, we are able to infer the only limitation of the disabled individual is the ability to move freely through out the company’s multi-floored headquarters due to being unable to utilize two of the four available elevators. The argument could be made that being able to use the two accommodating elevators should be sufficient, but let us consider the possibility that certain elevators don’t have access to all floors. This would limit the applicant’s ability to perform their required duties. Upon that determination, it becomes necessary for the company to make alterations to the elevators to make them compliant with the applicant’s needs should a job offer be made. The remaining task is to determine whether the required alterations to the elevator place an undue hardship on the company. Considering the company’s number of employees, comprising over 75, and the size of its seven floor headquarters, it would stand to reason the required revenue the company must generate to maintain this level of achievement would be substantially more than the $2,000 required to modify the two out of compliance elevators preventing Applicant C from becoming a productive member of the company. Even if the one day down time of the elevator under repair were a determining factor, the company would have the three remaining elevators available to continue daily operations with minimal inconvenience to the other employees. Considering the......

Words: 2008 - Pages: 9

Premium Essay

Lit1 Task 1

...LIT1 Task 1 Situation A: The Family and Medical leave act provides employees leave for up to 12 weeks. The leave is unpaid but their job is protected. The employee must have worked with the employer for a minimum of 12 months and working at least 1250 hours. They must also be employed by a company with 50 or more employees. In situation A, the manager was correct in allowing the employee to return to work at his previous pay rate. The employee worked at least 12 months and took only 11 of the allowed 12 weeks off. This also involved the children of the employee. Since FMLA doesn’t guarantee compensation during this time, then the employee is not entitled to back pay for the eleven weeks that he was not at work. Situation B: The Age Discrimination Act in Employment of 1967 is a ban against age discrimination. There are specific bans on age discrimination in areas of hiring, wages, promotions, and layoffs. This act prohibits marketing jobs to a specific age group or denying benefits due to employee age. It also prohibits mandatory retirement at a certain age. In situation B, the employee B received an above average review on a recent performance evaluation. Employee B is 68 years old and has been employed with the company for 42 years. Employee B was denied a job promotion. A job promotion went to his co-worker who was 32 years old and only received an average performance evaluation. Based on his recent above average performance evaluation,......

Words: 315 - Pages: 2

Premium Essay

Wgu Lit1 Task 310.1.2

...MEMORANDUM TO: Owner From: RE: Business Options Date: September 27, 2015 _______________________________________________ Changing the way you structure your business can be a frightening endeavor. You have been operating as a Sole Proprietorship for quite some time now, but it appears you have outgrown that business type. You have expressed a need to scale the business as well as a concern for your own personal liability. With those concerns in mind as well as the current state of your business, I recommend restructuring the business into a Limited Liability Company. I will try and address each of your concerns individually and explain how I came to this conclusion. As your business grows you will be opened up to substantial risk, should you decide to remain a Sole Proprietorship. You have expressed concern over debt and liabilities of the business. As an LLC you can protect your personal assets from future risk. Heaven forbid your business sustains a serious debt or claim that it isn’t capable of paying, but if does, your house, car, and personal possessions are safe from any business creditors. As an LLC you will continue to be taxed as a Sole Proprietorship with the ability to adapt to the future status of the business. You will not pay taxes on the income of the business; however profits and losses will pass through to you and be taxed on your own personal income tax returns. Should you take on another owner in the future, you will transition to be......

Words: 588 - Pages: 3

Premium Essay

Wgu Lit1 Task1

...LIT1 Task1 A1. The family medical leave act of 1993 guarantees an employee: - 12 weeks of leave in a 12 month period to care for a newborn or child within the first year of life. -12 weeks of leave in a 12 month period to care for their spouse, child or parent who has a serious medical condition. -12 weeks of leave in a 12 month period if the employee suffers from a serious medical condition and they are unable to perform the essential duties of their job. FMLA entitles eligible employees to take un paid yet job protected leave. A2. The employee is not entitled to pay for the 11 weeks that the employee was on leave. FMLA only guarantees the eligible employee 12 weeks off and protection of his job. The employee was allowed to take the 11 weeks off that he requested without loss of his job, position or salary rate. The employee was allowed up to 12 weeks of job protected leave within the first year of his childs life. His employer granted him the leave and his job was never at risk. A3. No violation has occurred in this scenario. The employee’s position and pay rate were held and kept the same. The employee was within the allowed time limit using only 11 of the 12 allowed weeks. B1. The age discrimination in Employment act of 1967 protects against: -Pre-employment inquires- The ADEA does not stop an employer from asking an applicant’s age or date of birth, but because this information may lead to denial of......

Words: 682 - Pages: 3

Premium Essay

Wgu Lit1 Task 2

...| Sole Proprietorship | Description | In a sole proprietorship, the business and single owner are one in the same. A single owner makes all decisions with regard to the business and the single owner retains all profits earned by the business. The single owner is also responsible/liable for all debts and obligations of the business on a personal level. | Two Advantages | A sole proprietorship is easy to create; there is minimal creation cost and time.The single owner has autonomy in decision making; sole owner makes all decisions related to the business and has complete ownership of business’s finances. | Two Disadvantages | It is impossible to add additional owners and to pass on business, business dies with owner. A single owner faces challenges with raising working capital and all loans made for the business are the personal responsibility of the owner. In addition, the single owner may be sued personally for the business’s liabilities. | Liability | Liability is unlimited; obligations of the business are personal obligations of the owner. The single owner is 100% personally responsible for business liabilities and debts. All of the owner’s personal assets are subject to lawsuit(s) made against the business. | Income taxes | The business itself does not file a tax return. There is no legal distinction between the owner and the business. All income earned by the business is considered personal oncome by the owner. Owner faces a higher rate of taxation because all......

Words: 2283 - Pages: 10