Lit1 Task a
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 has 100% profit retention. They may choose to invest it back into the company or use it for something personal. 6. Location * The owner has the ability to choose the location of the business or move it to a better location as they choose. 7. Convenience/burden * Sole proprietorships are very convenient and easy to start up since there are no governing laws as there may be with a corporation. The burden of the business including decisions made that may affect the businesses success are the sole responsibility of the owner.
General Partnership 1. Liability * The liability is shared by all partners of the business. Also, if one partner does something negligent pertaining to the business, all partners can be held liable for the one partners act. 2. Income taxes * The partners are each responsible to report their own earnings on their own tax return. This is the amount they received from the company as income. 3. Longevity * This depends on the agreement between the partners. Often if one partner is unable to continue their role in running the business, they have the option of selling their share in the business to the other partner(s). If no agreement is in place the business would dissolve
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 has 100% profit retention. They may choose to invest it back into the company or use it for something personal. 6. Location * The owner has the ability to choose the location of the business or move it to a better location as they choose. 7. Convenience/burden * Sole proprietorships are very convenient and easy to start up since there are no governing laws as there may be with a corporation. The burden of the business including decisions made that may affect the businesses success are the sole responsibility of the owner.
General Partnership 1. Liability * The liability is shared by all partners of the business. Also, if one partner does something negligent pertaining to the business, all partners can be held liable for the one partners act. 2. Income taxes * The partners are each responsible to report their own earnings on their own tax return. This is the amount they received from the company as income. 3. Longevity * This depends on the agreement between the partners. Often if one partner is unable to continue their role in running the business, they have the option of selling their share in the business to the other partner(s). If no agreement is in place the business would dissolve