LIT1 Task 1 Essay

1784 Words8 Pages
LIT1 Task 1A
1/10/2014

Sole proprietorship: Is the simplest and most common business structure. There is no legal distinction between the proprietor and the business, which means it is autonomous. You are entitled to all profits and responsible for all your business's losses and liabilities.
Liability- This falls directly on the owner. All debts, liabilities and losses fall on the owner. The owner's assets can be used to alleviate the business's debt.
Income taxes- All income generated through a sole proprietorship is taxed by the Internal Revenue Service. This is reported on the owner's personal tax return.
Longevity/Continuity- A sole proprietorship exits only as long as the owner is alive or until the owner decides to
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Longevity/Continuity- The death or absence of the general partner will dissolve the partnership unless stated in a prior agreement. The death or absence of a limited partner will not dissolve the partnership but the shares of the limited partner will belong to their estate.
Control- The general partner(s) maintain control of the business. They have equal authority unless otherwise specified in a agreement. The limited partners do not maintain any control in the partnership.
Profit retention- The general partners share profit and losses equally. The limited partner(s) will receive a amount of profit according to their investment and any agreements.
Location- A limited partnership is subject to the laws of each state. There are no federal guidelines for location.
Convenience/Burden- Like a general partnership a limited partnership is easily formed and can enjoy pass through-taxation. It can also be easier to get financing with a limited partnership. A downfall of the limited partnership is that the death of a general partner can dissolve the partnership unless a prior agreement has been established.

Regular C corporation: A regular C corporation is the most is the most sophisticated form of business and most common for large companies. It gets its name from the 1986 IRS code... C-corp.
Liability- The corporation, not individuals, are liable for the debts and obligations.
Income taxes- C

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