1. Introduction: Business can be started through different forms of organization. Forms of organization business includes sole proprietor, partnership firm, company, etc. To determine : Recommendation of form of business organization, tax impact and advantages. Form of business organization − Partnership Firm since they have debts and through mutually, they can collect on money to buy computer equipment. Also, since they are three persons who have specialized knowledge and skills, through partnership they can complement each other skill. Tax Impact − Income of partnership firm will be taxed and individually apart from profits, any other benefit from partnership firm, will be taxed in the hands of each partner. Advantages − 1. Through partnership, people can complement each other skill and thereby more chances of success. 2. There will be less legal formalities and thereby easy to start. 2. Introduction: Business can be started through different forms of organization. Forms of organization business includes sole proprietor, partnership firm, Company, etc. To determine : Recommendation of form of business organization, tax impact and advantages. Form of business organization − Company since they don’t have funds and through forming a company, they have more chances of getting the funds. Tax Impact − Income will be taxed in the hands of the company only. Advantages − 1. Liability of the owners will be limited to the funds contributed by them. 2. More chances of raising the funds. 3. Introduction: Business can be started through different forms of organization. Forms of organization business includes sole proprietor, partnership firm, Company, etc. To determine : Recommendation of form of business organization, tax impact and advantages. Form of business organization − Company since he needs fund and also have relevant knowledge of documentation requirements for the company. Tax Impact − Income will be taxed in the hands of the company only. Advantages − 1. Liability of the owners will be limited to the funds contributed by them. 2. More chances of raising the funds.

Financial Accounting: Information for Decisions

8th Edition

ISBN: 9781259533006

Author: John J Wild

Publisher: McGraw-Hill Education

See similar textbooks

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Chapter D, Problem 1E

Chapter D, Problem 3E

Students have asked these similar questions

What advice will you give to someone who has limited capital but possesses all the necessary skills to start a planned business? A)Build a sole proprietorship business and source funding from a bank or other personal connections. B)Set up a partnership business and teach them the necessary skills to make the business work C)Organize a corporation since it is the easiest form of business since it requires less paperwork D)Make an LLC and inviting only your closest friends to invest in your business

which type of organization should be formed. Sharif, Henry, and Korb want to start a tech firm. They are deciding between an S corporation and a C corporation. The founders want limited liability, but they also want to avoid paying corporate income taxes.

select a “start-up” company in an industry of your choice and provide a brief summary description of the start-up company you chose and the goods or services it provides. 1. As a start-up company, identify three Credit Risks the company currently faces today or could face in the future. Explain in detail why these risks are a threat to the company. 2. What advice would you give to the CEO of the company to prevent or minimize these credit risks?

Knowledge Booster

Solution Summary: The author explains that business can be started through different forms of organization, including sole proprietor, partnership firm, company, etc.

Want to see the full answer?

Chapter D Solutions