acccounting

entities\formation\liabilities of owners\management\transferability\taxation\ad\disad\practice guide\sole proprietorship:No formality\unlimited liabilities for his or her acts and all acts committed by employees within the scope of employment\one completely controls the business and strategy a benevolent dictatorship\The sole proprietor’s interest in the business is freely transferable\individual's personal income tax return\1.absence of formalities and fees on organization2. owner make own decision without delay or legal formalities. Carry little ongoing formalities3. not subject to as many regulatory and reporting requirements as the corporation.4. the “ double tax” is avoided. 5.Owners can establish a sole proprietorship instantly, easily and inexpensively.6.A sole proprietor need not pay unemployment tax on himself 7Owners may freely mix business or personal assets\1. Unlimited liability for all obligations of business2. termination of business at death of owner, so don’t retain value3.Owners cannot raise capital by selling an interest in the business\is the simplest and cheapest form of business formation, but there is tremendous exposure of unlimited personal liability. if use it, stress the need for substantial liability insurance coverage for tort claims to protect the client’s other assets from such risks.General Partnershipno formalities: verbal or written agreement, or mere conduct, express or implied agreement\unlimited personal liabilities for all partnership obligations\1owners manage directly or can agree to appoint managing partner. 2. inflexible: important action such as Admission of new members or amendment to partnership requires unanimous consent. ordinary matters of business require majority vote.3. equal rights to control partnership and share profit and loss equally if they did not provide how they would share profit and loss\partners cannot transfer ownership interest without unanimous consentFinancial interest may be assigned; membership