...your needs. 1) Sole Proprietorship The wonderful thing about a sole proprietorship is that they are simple to form because you are the one and only owner of the business. There is no legal difference between the owner and the business. You are ultimately in charge of making all decisions and handling all finances. • Liability: In a sole proprietorship, the owner, is the same as the business. The owner is held responsible for all of the liability as a business owner and personally. Any personal or business assets as well as future business earnings can all be a part of the risk of being a sole proprietor. • Income Taxes: When it comes to income taxes, all earnings of the business are reported under the sole proprietor as personal income, which tends to suffer the maximum taxation amount. The business is not taxed separately from the individual since they are essentially the same entity. • Longevity/Continuity: In a sole proprietorship, the business would cease to exist without the original owner. The business can also cease to exist by selling off or donating any of the business assets. • Control: The owner has complete control of the business. They are ultimately responsible for every single decision, finance and detail of the business. • Profit Retention: Any profit or loss of the company belongs solely to the owner. The owner can keep any profit from the business as their own and spend it accordingly. • Location: Sole proprietorships can...
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...to ever own a business it would be a sole proprietorship type of business. However, at this point in my life I do not see myself as a business owner. I am not the adventurist type, nor am I a risk taker. I do not trust my fellow man enough to partner up and I have an overwhelming fear of failing. If I were younger and could of over-come these issues, I would have owned and operated a small accounting service. I would start out as a sole proprietorship type of business and see where the adventure took me as a business owner. Advantages of a Sole Proprietorship •Owners can establish a sole proprietorship instantly, easily and inexpensively. •Sole proprietorships carry little, if any, ongoing formalities. •A sole proprietor need not pay unemployment tax on himself or herself (although he or she must pay unemployment tax on employees). •Owners may freely mix business or personal assets. Disadvantages of a Sole Proprietorship •Owners are subject to unlimited personal liability for the debts, losses and liabilities of the business. •Owners cannot raise capital by selling an interest in the business. •Sole proprietorships rarely survive the death or incapacity of their owners and so do not retain value. The sole proprietorship is the simplest business form under which one can operate a business. The sole proprietorship is not a legal entity. It simply refers to a person who owns the business and is personally responsible for its debts. A sole proprietorship can operate under the name...
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...Two legal forms of businesses are sole proprietorship and general partnership. A sole proprietor business is owned by one individual. A sole proprietorship business is the most common form of business and has many benefits. This type of business is easy setup, does not require large amounts of capital, and allows the single owner full management of decisions concerning the business. The proprietor receives all business’s profits and can easily transfer or sell the business if desired. The liabilities and risks of sole proprietorship are relatively large. The owner is responsible for everything associated within the business, including the possibility of losing all capital contributions. The owner has limited access to capital and assumes responsibility for all contracts entered into by the business. The owner also undertakes unlimited personal liability. Creditors may recover claims against the business from the owner’s personal assets such as home, automobile, and bank accounts. A general partnership is a voluntary association of two or more individuals for the purpose of establishing a business. The partnership requires certain rights and duties to be established either through a partnership agreement or by law. General partnerships have access to more capital than sole proprietorship so funding expansions or weathering slow down periods is improved. General partners are also personally liable for debts and obligations assumed by the business. A general partnership has three...
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...Sole Proprietor | • owner makes 100% of decisions • simplest to set up • least costly to operate • simple tax return | • personally liable for any debt/law suit • limited to personal resources if seeking to expand • limited by skills sets of owner | • a small dry cleaner • small restaurant | If you chose this option, it could limit the amount of money available to the business as it would all come from you and your spouse. | | | | | | | | | | | | | | | | Partnership | • pools financial resources of all partners • pools skill sets of all partners • need tax return of partnership that flows into personal return | • requires legal "partnership agreement" • partners may not agree on decisions • still personally liable | • a business requiring particular expertise; no one person has that so groups of people each with special skill get together • attorneys, accountants, and physician offices are examples | If you chose this option, you and your partners would have to agree on MANY things; in particular the goals of the company, how profits should be split, liabilities, etc. | | | | | | | | | | | | | | | | | | | | | | | | | | Corporation | • no liability issues to stockholders • unlimited ability to raise funds (just sell more stock) • greater ability to attract needed talent | • managers have to answer to multiple owners (stockholders) • many more financial reporting requirements (SEC, IRS, etc.) • double taxation...
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...BUSN105: Scenario You are an inventor who enjoys working around the home, cleaning, cooking, and doing minor home repairs and remodeling. You have little financial skills and no management skills. You have a great idea for a new kind of home appliance that meets everyday consumer needs. Your net worth is not very high so you have no idea if you’ll be able to “fund” this start-up. You know that currently there are similar products that meet the consumers’ needs, but those products are inherently dangerous. You know nothing about manufacturing other than that it costs lots of money to set up a plant. You are convinced that this new technology idea would be applicable in a wide range of other products. Your spouse, knowing how much time this venture will take away from family time, has asked you for an example of what you mean to make sure your idea isn’t some harebrained scheme. You mention the following as two similar ideas that were developed for one application but proved to have VERY widespread applications: a. The “clicker” was initially invented for use with TV’s, but now has widespread applications for a host of electronic applications, just like your technology could potentially do. b. The 3-prong power cord for electrical appliances was invented for higher quality appliances. Lower quality appliances have a 2-prong cord, which is a safety issue. Better quality power cords have the 3 “ground” wire, so now it has widespread application, just like...
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...Nontax Factors of a Sole Proprietorship Nontax Factors of a Sole Proprietorship Sole proprietors are individuals engaged in a business without the benefit of associates or a corporate charter. Sole proprietorships have many strengths and weaknesses. One of the strengths for the widespread use of the sole proprietorship generally relate to the central theme of the business form’s simplicity: the sole proprietorship has no formal legal requirements for establishment. To establish a sole proprietorship, all an individual is required to do is to start conducting a business for profit. There are no annual fees that have to be paid to form or maintain the sole proprietorship. Because no separate tax return is required, the accounting procedures for the business may be relatively simple. The income from the business is calculated and reported on Schedule C, Form 1040. The management structure also is straightforward. The owner of the sole proprietorship is responsible for operating the business on a day-to-day basis. Such vesting of all management authority in the owner allows for great flexibility. The sole proprietorship has no identity apart from the owner. The owner holds title to property used in the business. In addition, the sole proprietorship sues and gets sued in the owner’s name. Thus, the owner’s business operations have little or no distinction from personal financial affairs. It does not matter whether the sole proprietor deposits the proceeds of a sale...
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...Carroll L. Banks English 1010 Christina Norman June 27, 2013 Learning to Swim Learning to swim is something every person needs to know. It can be challenging and frightening. Some are afraid of getting in the water. Swimming has many benefits: fun in the water, boating, fishing, and an excellent exercise routine. Swimming is one of the best work-out for the entire body and uses all of the major muscle groups. It improves your cardiovascular and circulatory systems. Physical Therapists use it as an exercise for knee patients. Learning to float is essential to controlling the body motions. Children master this technique easier than adults because of the fear factor. Getting comfortable in the water is the first step. Start out in the shallow end of the pool. Using slight movements, such as holding onto the edge while walking around, lowering your body into the water, and learning to hold your breath above and below the water. Doing these exercises for 3 hours (two one and a half hour sessions) will make trainees comfortable and eliminate stressful fear. The dead man’s float is easier for beginners. Relax your body; stand in waist deep water with your stomach pulled in. Stretch or elongate the neck and tuck your chin back. Take a deep breath; hold it in and lean forward, putting your face in the water while you extend your arms forward. Allow your legs to float to the surface one at a time while looking at the bottom of the pool. Stay relaxed. Being tense will not keep...
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...As stated, Mr Ravi was the sole proprietor in a business selling Turkish carpets that the sole proprietor, also known as “proprietorship”, is an unincorporated business with one owner who pays personal income tax on profits from the business. With little government regulation, they are the simplest business to set up or take apart, making them popular among individual self-contractors or business owners. In other words, Mr Ravi is personally owes every penny that his business can't pay. So if his business doesn't have enough cash or assets to pay its debts, creditors can, and sometimes will, take his personal assets -- or at least the assets that aren't protected by state exemption laws. However, Mr Ravi later incorporated the business and set up a company, Ravi Carpet Sdn Bhd in April 2011. When a company is incorporated it is vested with legal personality. This means that in the eyes of the law, a company is treated as a legal person. When a company becomes incorporated under the Companies Act 1965, the following occurs: - The company is a body corporate with the powers of an incorporated company; - It may sue and be sued in its own name; - It has perpetual succession; - It may own land; and - The liability of its members may be limited. The Company Act 1965 does not completely define the word ‘company’. The best definitions come from case law. For example, Buckley J in Re Stanley [1960] stated: “… the word company has no strictly technical meaning. It involves two...
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...A sole proprietorship also known as a sole trader, or simply proprietorship is a type of business entity which is owned and run by one individual and where there is no legal distinction between the owner and the business. All profits and all losses accrue to the owner (subject to taxation specific to the business). All assets of the business are owned by the proprietor and all debts of the business are the proprietors'. This means that the owner has no lesser liability than if he was acting as individual instead of a business. It is a "sole" proprietorship in contrast with partnerships. A sole proprietor may do business with a trade name other than his or her legal name. Sometimes a sole proprietor is required to file a doing business as statement with a local government even if it is the same as his actual name[1] for certain types of businesses or as a requirement to open a business banking account. Advantages The many advantages of Corporations are described in that article; chiefly they are the ability to raise capital either publicly and privately, to limit the personal liability of the officers and managers, and to limit risk to investors. The disadvantages of corporations are advantages to proprietorship: reduced cost of doing business, as corporations must do many things like purchasing, accounting, and legal actions in more expensive ways and are subject to special taxes and fees; easier and cheaper to start and discontinue without required fees and legal expenses;...
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...LIT1 Task 310.1.2-01-06 Part A: 1. Sole Proprietorship: a. Liability: The owner of sole proprietorship is responsible for all bills that involve the business from supplies to employees. Owner personal’s assets are attainable by creditors in case the sole proprietorship is unable to cover for the bills. b. Income Taxes: The owner would be considers as ordinary person income in which they are tax heavily. Sole proprietorship is unable to take advantage of the lower income tax rate. c. Longevity/Continuity: It is impossible for sole proprietorship to continue because once sole proprietorship is no longer alive the business will no longer exist. d. Control: The sole proprietorship is control of the business. For example the sole proprietorship set his/her schedule (opening and closing) of business. e. Profit Retention: Sole proprietorship retains on the profit from the business. He/She is able to do whatever with the profits. f. Location: The sole proprietorship chooses where the business will be run at. g. Convenience/Burden: The convenience of being a sole proprietorship is being able to control business. The burden of being a sole proprietorship is being responsible for all aspect of the business from liability to income taxes. 2. General partnership: h. Liability: General partnership is still responsible for all debts and obligations. Evan if one of the partner has misuse the...
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...Holey Soles experienced rapid revenue growth. During this period, Holey significantly increased the production capacity, warehouse space and inventory in an effort to meet demand. Now Holey has excess manufacturing capacity beyond the actual manufacturing plan, this works extremely well when actual demand exceeds forecasted demand (pre-booked orders), but is it robust enough to handle the opposite scenario? In other words, the model is “optimized” for large upswings in product demand, thus allowing the company to manufacture products within a selling season, but is “sub-optimized” for large downswings in product demand, which is what happened between November and January and what will happen if the economy tanks. The challenge is building a supply chain that is robust enough to withstand a broad range of scenarios, and having enough forward visibility to economic changes and supply chain activities so that the company can take preemptive corrective actions. Holey Soles doesn’t have real-time visibility to actual demand and downstream inventory. From the case it looks like the company’s primary “demand signal” is not actual demand, but orders from retail customers. Diversify? Holey Soles makes the bulk of its sales in the summer, it makes sense to consider diversification. By extending the portfolio of products they can ensure a regular revenue stream from January through to December. Innovation is the key to creating a unique brand identity and distinguishing Holey Soles...
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...NATIONAL SENIOR CERTIFICATE GRADE 12 BUSINESS STUDIES FEBRUARY/MARCH 2013 MEMORANDUM MARKS: 300 This memorandum consists of 28 pages. Copyright reserved Please turn over Business Studies 2 NSC – Memorandum DBE/Feb.–Mar. 2013 NOTES TO MARKERS 1. For marking and moderation purposes, the following colours are recommended: Marker: Senior Marker: Deputy Chief and Chief Marker: Internal Moderator: 2. Red Green Black/Brown/Pink Orange The numbering of Assessment Standards is in accordance with the principle of progression from Grades 10 to 12, e.g. the first Assessment Standard is 12.1.2. Candidates' responses must be in full sentences for SECTIONS B and C. This would depend on the nature of the question. A comprehensive memorandum has been provided but this is by no means exhaustive. Due consideration should be given to an answer that is correct but: • • • • uses a different expression from that which appears in the memorandum. comes from another source. is correct and original. relates to another applicable LO or AS. 3. 4. NOTE: There are no alternative answers for SECTION A. 5. Take due note of other relevant answers provided by candidates and allocate marks accordingly. (In cases where the answer is unclear or indicates some understanding, part-marks should be allocated, for example, one mark instead of the maximum of two marks.) The word 'sub-max' is used to facilitate the allocation of marks within a question or subquestion. The purpose of circling marks (guided by...
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...Shoes with Soul: Two Friends Realize a Dream The creation of the company, Shoes with Soul, was created by a couple of friends who had previously met in college. Renee Albertelli and Richard Rodriguez both shared an idea that they wanted to start their own business someday. After they graduated college, they pursued their own careers. During this time and through their different experiences they realized there may be a possibility that they could actually start their own business. Albertelli’s current job allowed her to travel to different regions of the world. During her travels she realized that women in the places that she traveled wanted to earn a living and provide for their families. In one place that she visited she found a group of women in a village handcrafting sandals. She really admired the look and quality of their work. She saw this as being a potential business opportunity for her and her friend Rodriguez. The two friends both believed that the product would be successful and from there they developed a plan to start their business. Renee Albertelli and Richard Rodriguez both have certain personality characteristics that should assist them through the trials and tribulations of starting a business. The first characteristic that they exemplified was their commitment and determination to make the launch of a new business successful. Albertelli and Rodriguez demonstrated this level of commitment and determination when they both cashed in their retirement plans in...
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...Table of Content No. | Topic | Page Number | 1 | Planning | 2,3,4 | 2 | Organizing | 5 | 3 | Leading | 6 | 4 | controlling | 7 | 5 | Conclusion | 8 | Chapter One: Planning Gadget Importer Express: It is a sole proprietorship organization. There is only one owner of this organization. All the decision will be taken by the owner. He will take all the risk and he will enjoy the profit. Objective: The primary objective of Gadget Importer Express is to earn profit by delivering superior product to its customers. Customer will order the product from different e-commerce site like “Amazon”, “E-Bay”, and “Alibaba” etc. For them will will import the product and deliver it to them. We will take a commission. Mission: World famous ecommerce site are not operating in Bangladesh. Our mission is to take order from young people who want to buy nice and beautiful gadget from “Amazon”, “E-Bay”, “Alibaba” etc. sites. Vision: We want to be a large importer in future. Then we will import much more things from abroad. Office: Primarily I will hire an office in Nikunja-2. All the activities of the organization will be operated from here. Reason behind choosing this business: Now a day’s most of the young adults use internet. By using internet they can know about all the products available around the world. So a new types of demand is being created. Often they want to buy goods from abroad. But there is no specific means to satisfy this needs. Although there are some individuals...
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... Pg. 4 * Question 2 Pgs. 5-6 * Question 3 Pgs. 7-8 * Conclusion Pg. 9 Executive Summary The kiosk business would be registered as a sole proprietorship. Since it is a small scale business, not much money is required to start up the business. The owner has full authority over the business and can run it any way they please. Not many legal documents required, only a trading license. The business is very flexible, structure can be changed relatively easily. Not many employees required, maybe one or two at most. However, if the business goes in debt, the owner is held fully responsible and no one else; although being a small business, the losses won’t be very big. There is also restricted capital investment; not easy to get a loan for a sole trader. Not...
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