Legal Issues for Business Essay

Sole proprietary is an unincorporated business with sensation possessor who pays personal income tax on simoleons from the business. The benefit of the resole proprietorship is the tax advantage. The disadvantage of a sole proprietorship is obtaining capital funding. * financial obligation As the owner of a sole proprietorship, one is in person liable for each business debts, creditors may sue you person on the whole toldy to satisfy the debt. * Income taxes As a sole proprietor you must report all business income or losses on your personal income tax return the business itself is not taxed separately. * length of service Longevity depends on the owner and their ability to operate the business this fire be significantly affected if the owner becomes put or dies. * Control The owner is in complete retard of the business, It is the owners responsibility for all decisions pertaining to business trading operations * cabbage storage The owner has 100% control of profit retention. They may choose to invest their acquire or use it for personal use. * Convenience/Burden Sole proprietorships are convenient and easy to take over up since at that place are no governing laws. A burden of the business is the decisions made may affect the businesses success are the sole responsibility of the owner.GENERAL PARTNERSHIPAn pact formed by two or more persons. They are simple and inexpensive to create and operate, but the owners are all personally liable for any debts or legal actions * Liability The liability is shared by all partners. If one partner does something negligent, all partners can be held liable. * Income taxes All partners are responsible to report their bread on their own personal tax returns. * Longevity ordinary confederacys longevity is ground on the agreement between partners, they can agree to end their partnership as easily as they formed it. With a partnership between more than two partners, the person leaving can agree to sel l their function of the business.* Control Control of a general partnership is shared between all parties involved. * Profit retention All profits of the general partnership belong to the owners. * Convenience/Burden A general partnership has the lash-up of an easy start-up, all partners have a personal interest in the partnership and all profits belong to the partners.A main burden with a general partnership is the personal liability of all debts and legalities.LIMITED PARTNERSHIP exceptional partnership is similar to a shareholder of a general partnership, creation only liable for the amount of investment one has contributed. Limited partners have no precaution authority. * Liability A modified partner is only liable for the investments they have contributed, no more no less. * Income taxes A moderate partner reports their share of capital gains and losses on their personal income tax returns. * Longevity The longevity of a limited partner is based solely on the amount of investment one contributes and their continuation on their investment. * Control Limited partners generally do not have any control of a general partnership other than their investment. * Profit retention The amount of profit a limited partner will receive is based on the amount of investment into the company. * Convenience/Burden The convenience of a limited partnership is one get to share in the profits and losses, but they do not have to participate in the business itself. A limited partners liability is only limited to the investment they have contributed. A burden of limited partnership can be the lack of affair for the investment one has contributed,C-CORPORATIONIs a legal way that businesses can organize to limit the owners financial and legal liability. C-corporations are taxed separately from the owners. Though they are taxed separately, c-corps have the disadvantage of double taxation, being taxed on the corporate level as well as the shareholder level. * Liability C-corporations provide limited liability to owners, therefore, owners are not usually responsible for the corporations debts and liabilities. * Income taxes C-corporations are taxed as a separate entity downstairs corporate tax rates for any business income, any profits made to owners are hence taxed again at the personal income tax level.* Longevity The life of a C-corporation can exist indefinitely based on the shareholders, by selling of stocks, measureless number of owners and transfer of ownership. * Control Control of a C-corporation is held by its shareholders, but may be delegated to a board of directors. * Profit retention -Because a C-corporations income is taxed twice, paying taxes on its income and the shareholders also paying personal taxes on the dividendincome received from the corporation, there is less profit retention than that of a general partnership. * Convenience/Burden C-corporations have the convenience of unlimited shareholders, as well as no restri ctions on who is allowed to become a shareholder. The double taxation of a C-corporation can be a burden to shareholders based on profit retention.S-CORPORATIONA corporation that does not pay federal taxes. All corporate income and losses are passed with to the shareholders and claimed on their personal income taxes. * Liability Shareholders of an S- corporation are offered limited liability for the corporations debt. * Income taxes S-corporations do not pay income taxes, instead, income passes by to the shareholders and is claimed on their personal income taxes. * Longevity Similar to a C-corporation, an S-corporation can exist indefinitely, though S-corporations have regulative restrictions on the number of shareholders it may have. * Control The control of an S-corporation is held by its shareholders, but may be delegated to a board of directors. * Profit retention An S-corporation allows its shareholders to keep more of the earned profits by passing by dint of its incom e taxes directly to its shareholders unlike a C-corporation which is double taxed.* Convenience/Burden S-corporations have the convenience of retaining more of its profits by passing through its income taxes directly to its shareholders, avoiding the double taxation of a C- corporation. S-corporations have the burden of restrictive restrictions, including limiting the number of shareholders shareholders cannot be corporations and must be U.S. citizens.LIMITED LIABILITY COMPANYA Limited liability company (LLC) is a business entity that offers its owners limited liability. Owners are not personally liable for any debt other than their investment. * Liability owners of a LLC have limited liability they are only liable for their investment. * Income taxes A LLC is not a taxable entity, income taxes are passed through to the owners and their personal income taxes. * Longevity Limited liability companies can exist indefinitely, they have the option of transferring ownership without r estriction. * Control The control of a LLC can be based on the number of owners as well as the amount of investment one has in the company. * Profit retention Profits of a LLC is passed through to the owners and istaxed at their personal tax rate, allowing owners to pay less in taxes and retain more profit. * Convenience/Burden Limited liability companies have the convenience of pass through taxation, allowing the owners larger profits. LLCs have the burden of varying restrictions from state to state, there are different reclamation fees and franchise taxes that must be paid and LLCs must pay self-employment taxes.