Legal entities

Starting and Naming a Business Shania Jackson is interested in starting a Christian coffeehouse near Denver, Colorado. A few family members and an acquaintance, both believers and nonbelievers, have expressed interest in investing and become a part of her business. She has researched franchise opportunities with various stipulations as a method for starting her business. She is also considering naming her business “The Gathering Place”. Business Structure With a desire to be an entrepreneur

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 means that creditors have the

general partnerships, C corporations, and limited liability companies. Sole Proprietorship – the business is owned by a single individual Partnership – two or more people serve as co-owners of the business Corporation – the business is a separate legal entity Limited Liability Company – a hybrid with characteristics of both a corporation and partnership 2. Why do many entrepreneurs initially set up their businesses as sole proprietorships? Why do many successful entrepreneurs eventually decide to convert

profits of the LLC. “The great flexibility that is afforded by an LLC makes it one of the most popular types of business formations used” (Waller). The last business option that will be discussed is the Corporation. A Corporation is “a fictitious legal entity that is created according to statutory requirements” (Cheeseman 478). The biggest advantage of a corporation is the protection of personal assets. Shareholders, directors and officers are typically not liable for the company’s debts and obligations

businesses are relatively small and in most cases the financial resources of one person are adequate to cover operational expenditure. Characteristics of Sole Proprietorship 1. Simplicity – Starting a sole proprietorship is quiet simple. The only legal formalities are applying for the required state or local license or permit. If the sole proprietor wants to operate the business under a different name other than his, then a special filling certificate is needed. 2. Control – The sole proprietor

Income taxes The fundamental tax benefit of a limited partnership is that it is a flow-through entity — all profits and misfortunes stream specifically to the individual limited partners. The business itself pays no taxes on its income. The partners declare the the income on their personal taxes. Continuity of the organization The coherence of a limited

In our team opinion, this company is classified as an limited liability company, which as an alternative to a general or limited partnership. First，this company has two person, an LLC has two or more members. The income of LLC is not taxed at the entity level but passes through to the member. The member of LLC only need to pay their personal income tax. While the LLC does not pay tax income. Compared with LLC, the closed corporate need to pay personal tax income and corporate tax income. This mean

not require legal expertise or fees when forming • Most popular type of business organization comprising • Excellent option for business that only have a small number of employees (Stevick, G.E., 2006). Two Advantages 1. The owner has complete control over the business, and has all decision-making power. 2. Owner retains all profits made by the organization. Two Disadvantages 1. Unlimited and unshared responsibility means there can be concerns related the payment of debts and legal action being

partnership, they would each be held responsible for any liabilities owed by the new company, even if one of the partners didn’t partake in the act. 3. Albert and Baker have considered forming a corporation for their new business, thus a fictitious legal entity that is created according to statutory requirements. In order for Albert and Baker to form a corporation, they need to comply with the states corporation codes, thus state laws that control the formation, operation, and dissolution of corporations

Beth and Sam will need a certificate. This certificate must have to include the name of the limited partnership and the type of business this partnership will be. The certificate must show the address of the business and who will receive the formal legal notices regarding the business. Also included must be the name and business address of each general and limited partner, along with the date the limited partnership will dissolve. Lastly, the amounts contributed by each person and any future amounts