Lit1 Task a Essay

1390 Words Feb 27th, 2013 6 Pages
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 affected if the owner becomes sick or dies. 4. Control * The owner has complete control of the business. The owner is totally responsible for all decisions pertaining for business operations. 5. Profit retention * The owner
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This is typically determined by how much money each limited partner is investing in the company. 6. Location * The decisions on location must be agreed on by all partners. 7. Convenience/burden * Limited partnerships have the convenience of allowing multiple investors as limited partners to assist with cash available to run the business and support improvements or other investments into the company. The burden of running the business falls on the general partner.
Regular C Corporation 1. Liability * The liability does not fall on one individual instead it is assumed by the business in a corporation. Individuals representing the company can still be personally sued in some states. 2. Income taxes * Taxes are paid through the corporation on a corporate tax return. It is separate from the owner’s income taxes, commonly referred to as shareholders. Shareholders also include income or losses on stocks sold or dividends earned on their yearly individual tax return. 3. Longevity * The longevity of the company is not affected when a shareholder sells their share of the company or dies. 4. Control * The control of the corporation is managed by an elected board of directors. The officers in the company normally have to be approved by the board of directors before they are offered a position to lead the company. 5. Profit retention * The profits are shared

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