When opening a business there are many choices a person can take to protect assets and liabilities some advantages and disadvantages they are listed as followed: • A Solo proprietorship this is the most basic type of business to establish‚ and least amount of paper work involved to set up. o Advantages the sole proprietorship has complete control and decision-making over the business. The sole proprietorship can take discretion of the sale or transfer of his/her own terms. No corporate tax payment
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1 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; this
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restructure their obligations and continue the business can choose. In chapter 7 a trustee is appointed‚ available assets are sold‚ and creditors are paid to the extent funds are available. This option is only available for partnerships‚ limited liability companies‚ and corporations. Small businesses with sole proprietorships can also file for chapter 7 but it depends on their income. Another
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BUSINESS OWNERSHIP Compare forms of business ownership. Three basic forms of business ownership Sole proprietorship Partnership Corporation Sole proprietorship A business owned and operated by one
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Table 1.1 Balance Sheet and Topics in Financial Management Share Capital Equity Capital Structure and Cost of Capital Preference Reserves and Surplus Debentures Unsecured Loan Current Liabilities & Provisions Working Capital Trade Creditors Financing Policy Provisions
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Business Forms Worksheet There are seven forms of business: sole proprietorship‚ partnership‚ limited liability partnership‚ limited liability Company (including the single member LLC)‚ S Corporation‚ Franchise‚ and Corporation. 1. Research and provide three advantages and three disadvantages for each business form. 2. Provide a 100- to 200-word summary in which you provide an example business that you would start for each form. What is legally necessary to file in order to form that business
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in when starting a business. Because the fees to obtain a business name and certificate are minimal a sole proprietorship is an inexpensive way to begin a business. An individual who prefers complete authority with the business decisions and is limited on funds a sole proprietorship is the ideal structure. The results are that the earnings are taxed only once and can be taxed as personal income. The disadvantages of the sole proprietorship structure are that the individual is liable for everything
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Sheet: This is a financial statement used by a given firm to summarize their company assets‚ liabilities and shareholders’ equity at a specific time. The three balance sheet segments will give investors of the company an idea of just what exactly the company owes and owns and well as outlining the amount total invested by all shareholders. A common rule for Balance Sheets is as follows: Assets = Liabilities + Shareholders’ Equity http://www.investopedia.com/terms/b/balancesheet.asp Cash Flow Statement:
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are five different forms of business organizations that I can consider when planning to start a business. They are 1. Sole proprietorship 2. Partnership 3. C corporation 4. S corporation 5. LLC – Limited Liability Company It is important to understand each organization’s structural make up‚ to make an informed decision about which form of business organization is best suited for my consultant business. In order to select the most appropriate business
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as unlimited liability-the risk of personal losses‚ limited financial resources‚ management difficulties‚ and overwhelming time commitment. The second kind of ownership is partnerships‚ a legal form of business with two or more owners. There are four majors advantages in this type of business‚ such as more financial resources‚ shared management skills and knowledge‚ longer survival and no special taxes. But there are also four majors disadvantages such as unlimited liability‚ division of
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