Essay about Lit1 Task 310.1.2-01-06 - 2862 Words

Sole Proprietorship Sole proprietorship is the most common form of business in the United States. It is a relatively simple way for an individual to start a business since legal costs and business requirements are minimal, and the owner has complete control over the business. Though a sole proprietor is not responsible for any corporate tax payments, the owner is responsible for taxes incurred on the income generated from the business as part of his or her personal income tax payments, and personally shoulders any other risks or obligations. A sole proprietor may also choose to file their business under a fictitious business name or a DBA (doing business as), allowing him or her to operate and market the business under a more typical†¦show more content†¦Liability All liabilities are the responsibility of each partner. In the event of litigation, any creditors can go after the personal assets of each partner to recover any debt owed. But since liability is spread out between the owners, one may feel less risk is being taken. 2. Income Taxes General partnership may also benefit from pass-through taxation, meaning the partners are taxed like sole proprietors. Business income is reported on the personal tax filing while business losses can be deducted to reduce personal tax liability. The partnership itself is not subject to federal income tax. However the partnership needs to file an information return utilizing the IRS Form 1065. 3. Longevity or continuity of the organization Once the partnership agreement is fulfilled, the general partnership may dissolve. A buy/sell agreement may be included in the articles of the partnership to allow the partnership to continue, in the event a partner withdraws from the group. Similar to sole proprietorship, general partnerships tend to have a difficult time rounding up funding and resources, since most of the necessary capital comes from each partners personal assets. This in turn may hinder longevity and growth of the organization. 4. Control In a typical general partnership, all partners will have equal rights and control over the business. It allows any partner to act on behalf of the business to make decisions and negotiation withShow MoreRelatedLit1 Task 310.1.2-01-062176 Words   |  9 Pages1      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; thisRead MoreLit1 Task 310.1.2-01-06 Essay examples1487 Words   |  6 PagesLIT1 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 proprietorshipRead MoreLit1 Task 310.1.2-01-06 Essay2863 Words   |  12 PagesIdentified 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. Read MoreWGU LIT1 Task 310.1.2-01-063823 Words   |  16 PagesPart 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 advantageRead MoreStudy Notes for Task 11269 Words   |  6 Pages†ºAdd 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 characteristicsRead MoreLit1 Task a Essay1390 Words   |  6 PagesLIT1: 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 significantlyRead MoreSample Resume : Business Management1551 Words   |  7 PagesNatasha 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