Legal Underpinnings of Business Law Essay

609 Words Jul 16th, 2013 3 Pages
Legal Underpinnings of Business Law
OMM 670: Legal Environment
February 25, 2013

Legal Underpinnings of Business Law Business | Type of Business | Liability Exposure | Compare | Contrast | Tinker’s Home Security Service | Sole proprietorship | Unlimited | Monetary rewards are from both the Proprietor & business | Sole Liability | Tinker & Tailor’s Home Security Service | General partnership | Unlimited | All partners are responsible whether silent or active | If you are named in the business you are a partner and also liable | Tinker & Tailor’s Home Security Service | LP | Limited | To obtain funding for a business venture-will only loose what is put in | My not participate in the business decisions |
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The personal liability exposure would be minimal. With an LLC if I messed up the partners would not be responsible. The consequences are not as bad is if I was in a corporation.
The LLC is more flexible. The positives are less record keeping and more profit sharing. The state would have some say into my company so I would have to keep up with guidance regularly. The negative of this company is that once a member leaves, the entire company must complete their duties and responsibilities and then dissolve. Another down fall is that self-employment tax contributions towards Medicare and Social Security.
“The net income of the LLC is subject to this tax. The federal government does not recognize LLC as a business entity for taxation purposes, all LLCs must file as a corporation, partnership, or sole proprietorship tax return. Certain LLCs are automatically classified and taxed as a corporation by federal tax law.” SBA. (2013)

Reference
Brown, D.R. & Harvey, D., (2006). An experiential approach to Organizational development.
(7th ED.). Upper Saddle River, NJ: Prentice Hall
Cameron, P., (2012). Defending a Company in a Breach of Contract Lawsuit in San Diego Superior Court. Retrieved from http://sandiegolegaloffice.com/2012/12/defending-a- company-in-a-breach-of-contract-lawsuit/
IRS. (2013). Limited Liability Company (LLC). Retrieved from http://www.irs.gov/

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