Lit 1 Task 1 Essay

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Sole Proprietorship Liability- Owner is liable for 100% of debts, taxes and liabilities. Income Taxes- Taxed like regular income tax; owner claims it at year end and pays income tax on all earnings. Longevity/Continuity- Company will likely die off if owner does. The company, being one and the same as the owner, cannot continue without measures being taken to pass on Control- Owner has complete control over all decisions made; complete autonomy Profit Retention- All profit belongs to owner Location- The only reason location is an issue is filing for local and state permits based on the business type; may pick up and move when and wherever owner desires. Would need to file a DBA form if owner is operating under a…show more content…
Because there are more people that are able to enter into a contract, being help accountable for someone else's actions may prove to be frustrating. Limited Partnership Liability- The general partner would be liable for all unlimited responsibility on all tasks and debt, while the limited partner will not loss more than their investment. Income Taxes- Taxes are paid as income tax, unless the limited partnership is classified as a corporation by the IRS for tax purposes. In order to keep from being taxed this way, you would have to stick solely to the contract as written, and keep away from operating outside of the agreement. Longevity/Continuity- The partnership would keep operating outside of the limited partner's death, as per usual, however, if a general partner dies, and the agreement hasn't covered the possibility of their death and also agreed that the business will keep running past the death of a general partner, the partnership will immediately dissolve. Control- A limited partner has no say in the running and management in the business. The general partners will have the ability to run the business as they see fit. Profit Retention- Profit is split between partners, usually between a set on agreed percentage. Location- Similar to the General Partnership, the Limited Partnership may be moved to another state easily. A new DBA filing must be made in the

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