Legal Existence Of Proprietorship Is Extension Of Proprietor Essay

• LIABILITY – All liability rests in the sole proprietors shoulders. There is no hiding from liabilities of the company for the owner, nor is the business sheltered from liabilities of the proprietor. • INCOME TAXES – Since the owner and his/her business are one in the same, all income is then treated as personal income to the

Which of the following is not a required test for the deduction of a business expense?

B) Managers of LLCs are personally liable for the debts, obligations, and liabilities of the LLC.

Sole Proprietorship Sole proprietorship is the most common form of business in the United States. It is a relatively simple way for an individual to start a business since legal costs and business requirements are minimal, and the owner has complete control over the business. Though a sole proprietor is not responsible for any corporate tax payments, the owner is responsible for taxes incurred on the income generated from the business as part of his or her personal income tax payments, and personally shoulders any other risks or obligations. A sole proprietor may also choose to file their business under a fictitious business name or a DBA (doing business as), allowing him or her to operate and market the business under a more typical

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.

• Liability: The owner has unlimited liability. When the business fails it is up to the owner to pay all the creditors off.

A sole proprietorship is a form of business that is owned by a single individual.  • Liability – Due to the lack of legal distinction between the owner and the business, the owner is fully responsible and liable for all debts that the business incurs in the same manner that an individual is fully responsible and liable for all debts that they incur. There is no legal distinction between the assets of the owner of the sole proprietorship and the business; this means that creditors have the ability to come after the owner’s business and personal material assets.   Income Taxes – Since the business is the same as the owner of the sole proprietorship, all profits or losses from the business are filed by the

LIABILITY – There is no separation between the individual and the business. As the owner and operator of a sole proprietorship, all of the profit and loss is the personal responsibility of the business owner creating unlimited liability.

* An owner has unlimited liability both personally and as the company owner. Liability is a disadvantage in a sole proprietorship.

case brief---Gregory, a comedy writer, entered into a contract with Wessel, a comedian. The contract provided that Gregory would provide Wessel with a 15 minute monologue for his upcoming appearance on the comedy hour and Wessel will pay $250 to Gregory. All performers could make $500 per appearance on the comedy hour. and when Wessel was scheduled to aper on the comedy hour, Gregory informed him that he was unable to provide the monologue, because last time Wessel was asked to make special guest appearances at three local comedy clubs performance during the comedy hour. and Wessel bought lawsuit to Gregory for beach of contract and request damages of $1250.

LIABILITY – The owner is held responsible for all debts and expenses accrued by the company via the concept of unlimited liability. If the expenses and debts aren’t satisfied, the owner of the business can be sued for breach of contract.

“Liabilities are debts: money you owe. Every business carries some liabilities—for example, ongoing payments to suppliers, rent for your office, compensation to employees, or fees for contractors” (Mancuso, 2014). Added liabilities may result if a business is ravaged by a fire or flood or if the business owner(s) become the victim of a lawsuit—for example, a patron, client or customer decides to sue your company after hurting themselves on company property. It is the intent of this paper to examine the role and responsibility of liability in different types of businesses from sole proprietorships to

The advantages to the sole proprietorship are single control over the business and its decisions, easy to start up, less regulations and paperwork burden that the other types of business. The disadvantages are unlimited liability for their company debts and actions. The law does not recognize any distinctions between the owner’s business assets and personal assets. Banks are very skeptical about lending to these types business because there is only one person to hold liable for repaying the debt.

But with advantages, there are also disadvantages of owning your own business. Five disadvantages of a sole proprietorship are: 1) The owner is personally liable for all debts and incurs all losses. The sole proprietor is responsible for all debts that the company owes. The owner takes all losses. There are no other owners to

The advantages to a LLC are: 1) Reduction of personal liability. A sole proprietor has unlimited liability, which can include the potential loss of all personal assets. 2) Taxes. Forming an LLC may mean that more expenses can be considered business expenses and be deducted from the company’s income. 3) Improved credibility. The business may have increased credibility in the business world compared to a sole proprietorship. 4) Ability to attract investment. Corporations, even LLCs, can raise capital through the sale of equity. 5) Continuous life. Sole proprietorships have a limited life,