1 Part A Sole Proprietorship 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
LIT1 Task 310.1.2-01-06 Part A Sole Proprietorship - • 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. • INCOME TAXES – As a sole proprietor all business income or losses must be reported as personal income tax. The business itself is not taxed separately. • LONGEVITY/CONTINUITY – The sole proprietorship
Identified with letters LLC can include various types of members including a corporation, partnership, or multiples of each. There are many laws that have to be understood at the federal level as well as at the state level when forming an LLC. The actual task of forming an LLC is simply the actions of creating a charter and operating agreement for the business. The tax status structure of a partnership and the limited liability of a corporation make an LLC a favorable choice for business entrepreneurs.
Part A (The Report) Sole Proprietorship A sole proprietorship is the most common form of forming a business in the United States. The individual that forms the sole proprietorship and the business is one in the same. For example, if the business owes creditors money, the individual who created the sole proprietorship business has to pay the bill. When entering into contracts the individual is actually agreeing to the contract since the person and business is one in the same. The biggest advantage
›Add account Sign out Settings LIT1 Task1.pdfAdd to DriveEdit onlineDownload originalShareFileViewHelp SUBDOMAIN 310.1 - BUSINESS LAW Competency 310.1.2: Organizational Forms - The graduate can select the appropriate form of organization for a business. 310.1.2-01: Differentiate between a sole proprietorship and general partnership. 310.1.2-02: Differentiate between a general partnership and a limited partnership. 310.1.2-03: Identify the distinguishing characteristics
LIT1: Task 310.1.2-01-06 Task A Sole proprietorship 1. Liability * An owner has unlimited liability both personally and as the company owner. Liability is a disadvantage in a sole proprietorship. 2. Income taxes * The owner is responsible for filing taxes and is allowed to file taxes as part of their personal income taxes. 3. Longevity * This depends completely on the owner and there continued ability to operate the business. The operation of the business can be significantly
Natasha Rodas LIT1 Task 310.1.2-01-06 Part A Sole Proprietorship – As a sole proprietor, you own your business solely; no other interested parties are involved. • LIABLITY – The business is controlled and operated solely by the individual, and all profit/loss is the responsibility of the business owner; creating unlimited liability. • INCOME TAXES – All business income/expenses are to be reported as personal income tax; not taxed separately. • LONGEVITY/CONTINUITY – Once the business owner is