Changing a company organization from a sole proprietorship to an LLC
By converting to a Limited Liability Company, an organization is entitled to a number of advantages in the form of benefits. The owner of a business is entitled to receive protection of the entire business unlike in the sole proprietorship. The informality of the business structure is kept under check even with this transformation. As a sole proprietor, there are limited liability to debts and obligations. There is a likelihood of losing property in case the business is sued. With LLC, the business has limited personal protection from debts and other challenges. With LLC, there is an open opportunity to raise capital unlike in a sole proprietorship. Continuity is another facet that is required of every business.
When a business or company shifts from being a sole proprietor to an LLC, it attains growth…… [Read More]
Sole Proprietorship Before Referencing
Family business structures
In businesses that involve numerous members of the same family, the preferred business choice of conduct is the partnership. hat advantages may occur for the family members by conducting business in this form?
One of the advantages of constructing a joint proprietorship or partnership for a family business is that unlike a sole proprietorship, liability is divided equally between all family members.In other words, if the business should fail, no single individual is solely responsible for all of the financial obligations incurred by the business. Individuals in a joint proprietorship are only as liable under the law in proportion to their ownership or investment in the business. This enables certain members of the family to be more responsible for the actions of the business than other members.
For example, through the construction of a limited as opposed to a general or equal partnership,…… [Read More]
Sole Proprietorships, Corporations, and Partnerships:
Just what are they?
One of the first decisions any individual or group of individuals must consider when starting or joining a business, is the legal form the entity will take. In the United States, as in many other countries around the world, the three main forms of business structures are the sole proprietorship, the corporation, and the partnership. Further, each type carries with it specific advantages as well as disadvantages.
In the first business model, the business is owned and operated by the individual. This means that, in effect, the individual in question is the "sole" owner and operator of the business. There are several advantages to this structure.
First, sole proprietorships are easy to form. In the sole proprietorship, there are few limitations on formation, and there are a small number of forms to complete, usually in the local…… [Read More]
Sole proprietorship- In a sole proprietorship, one person owns all of the business assets and is the sole decision maker. The sole proprietor has unlimited personal liability for business debts, and all profits and losses pass through the business to the owner (Bouchoux, 2007).
General partnership- In a general partnership two or more people co-own all business assets and share decision-making power. Each partner has unlimited personal liability for business debts, and can be subject to pass-through taxation (Bouchoux, 2007).
Limited partnership- In a limited partnership one or more general partners have unlimited personal liability for business debs and obligations, but limited partners do not manage or control the enterprise and are only liable up to the amount of their investment in the company. Limited partnerships must be created according to state laws (Bouchoux, 2007).
egistered Limited Liability Partnership- Partners in this type of partnership are not liable…… [Read More]
("Definition of a Corporation")
A fourth advantage of a corporation is that it is easy to raise various forms of financing. The structure of corporation allows it to be owned by large numbers of individual (shareholders). This is significant, because it means that a corporation can use the public markets to be able to raise investment capital. As a result, some corporations have the potential to raise billions of dollars through the public markets using such financing methods. ("Definition of a Corporation")
There are number of different drawbacks of corporations the most notable would include: there are more costs for establishing such entities, there are formalities and there is unemployment insurance. In general, the costs for establishing a corporation can range from a few hundred dollars to thousands of dollars in legal fees. As there will be time spent filing all of the appropriate paperwork with the courts and…… [Read More]
When determining which form of business organization to adopt for one's business, it is important to consider a number of variables before making a decision. These factors can include: the level of control the owner wishes to have, the structure of the company, the company's level of vulnerability to lawsuit, expectations of profit/loss, and whether there is a need for re-investment of capital back into the company. These considerations can greatly impact the form of organization one chooses. For the case of West Casing, these factors when addressed point to an S Corporation being the best option for Steve West and his 6-man crew. This paper will explain why and S Corp would work for West.
The chief characteristics of the S Corporation are that the business is set up as a separate entity (so in the unfortunate event that there is a casing leak and the company…… [Read More]
These elements are important, because they are showing how these kinds of entities are ideal for a group of individuals that will be directly involved in the business. As, they want to maintain operational control; but they want some kind of: division of labor, responsibilities and financial contributions. ("Incorporation") (Hernandez) This is similar to a proprietorship in that it is easy to establish and there are less regulations. However, partnerships are different, because there is stated contract that defines the percentage of ownership and liabilities for these kinds of organizations.
A corporation is considered to be a separate legal entity. As, these kinds of organizations are: responsible for their own activities, they can take on debt, enter legal agreements, own property and they are also liable for any taxes as a business. This means that the firm will pay taxes on all income that is received. At the same…… [Read More]
Legal, Social, and Economic Environments of New Product Development
There are three basic forms in which of businesses can be organized: sole proprietorships, partnerships, and corporations. There are also many different versions of each form. For example, there are many different kinds of corporations. However, based on the scenario represented for the individual who has an idea for a product a sole proprietorship would most likely represent the ideal form for the individual to get started with and if the product does turn out to be a success then they could always reorganize the business later on. Although the individual has an idea for a product that he believes will be a success he does not have a lot of capital to launch a major product development campaign. Furthermore, although the economy is recovering, the external environment is still plagued with high levels of competition and…… [Read More]
Corporation business structures
Preference of Corporation Business Structure Over Other Known Structures
In this paper, we will choose the corporation business structure as an ideal choice for the firm McDonalds in order to carry out its operations. We will define the merits which a multinational firm like McDonalds can take advantage of if because of this structure, also we will have an in-depth look on other structures such as sole proprietorship and partnership and focus on their strengths and weaknesses.
eview of Sole Proprietorship and Partnership
Let's review the structure of sole proprietorship first, it is regarded as one of the least expensive and easiest way to start any business as compared to corporative and partnership structure. Here the overall business as well as the business owner is viewed legally as a same entity. This however has its own disadvantages which in our chosen case of McDonalds could…… [Read More]
, 2010). Where there is the sale of shares, there is also a great potential that the existing owners will have little control over who the shares are subsequently sold to, especially in a quoted company. The firm will also be subject to the Sarbanes-Oxley Act (SOX), which was also known as the "Company Accounting eform and Investor Protection Act," in the Senate (Libby et al., 2010).
Decision for the Business
As the business is a new idea, and will initially only involve a single person, the idea of a partnership may be eliminated. This leaves sole proprietorship and corporation. If there is to be only one owner the S-corporation may be used, as this may accommodate a single shareholder. This structure may be attractive as the business will be a separate entity, especially as the owner will not carry any personal liabilities for the business debts. However this…… [Read More]
Legal Structure of Business
For a McDonalds franchisee, there are three options. The franchise can be operated as a sole proprietorship, a partnership, or a corporation. The real issue is not that there are options, but which option should be chosen. It is not always possible to make that determination easily, since there are many factors that have to be considered in each choice. A sole proprietorship is operated by one person. That person is solely responsible for the business, and there is no complex legal structure. That person can reap all the profits and rewards, but he or she also shoulders all the liability for any lawsuits or other issues that might go wrong. In a partnership, the profits and the liabilities are shared between two people. There can be some adjustment as to which person is "more" responsible for specific issues, or it can be a completely 50-50…… [Read More]
Partnerships demand that all partners (both general and limited partners) be on the same page financially and within the scope of the business operations. They require shared a goal and vision for the entity, and a mutual understanding of each owner's role and the parameters for exerting control. Perpetual lines of communication must be available for all parties in response to changing dynamics and the occurrence of unforeseen events. This is particular relevant in the restaurant industry, where consumers have many choices and often make them based on little substance
. The restaurant industry is fraught with sudden changes, which can require added attention, effort and capital in a short period of time. Therefore, a thorough understanding of the roles of each owner, be they a general or limited partner, is essential to a properly functioning partnership.
Additionally, effective partnerships require regular meetings and reviews of all business operations, and…… [Read More]
Entity Selection Exercise
Idea or vision for the business:
Joe's Landscaping and Tree Trimming -- Equipment rentals, too, on request! Make your land look beautiful as nature intended, with a little help of the hands of Joe!
Identify legal and regulatory issues to be considered in creating or modifying this business
At present, Joe operates under the legal and tax status of a sole proprietorship. A sole proprietorship is an unincorporated business owned by one individual, in this case, Joe. A sole proprietorship is one of the most popular forms of business entities because legally and for tax purposes, is the simplest or least bureaucratic form of business organization to start and maintain. The business has no existence apart from the owner and is particularly popular with singular business entities, or local entities, such as Joe's business, which is limited to a fixed area, does not seem ripe for franchising,…… [Read More]
Small Business Idea
hen starting a new company, there are a number of different forms the business can take. It is important to understand the differences between the forms, including their advantages and disadvantages. The main forms for a new small business are sole proprietorship, partnership, C-corporation and S-corporation. The small business that is being considered is a gourmet food truck that will sell the finest Southern barbeque. The truck will be mobile, selling at multiple locations around town. The truck will have a variety of menu items and will generally operate as any restaurant would with respect to the local regulations.
The first form of business to be discussed is the sole proprietorship. This form of business is the easiest to set up. Many "mom and pop" businesses take this business form, which is usually used when the business is only run by one or two people. In sole…… [Read More]
The control is exercised by at regular board of directors' and annual stockholders' meetings. Records have to be kept to document decisions that are made by the board of directors. In small, closely held corporations operations are more informal, but record-keeping is not eliminated entirely. Officers of a corporation can be liable to stockholders for improper actions. Liability is generally limited to stock ownership, except where fraud is involved (ibid).
The most important attribute of a corporation is that shareholders in the company are not liable for corporate debts. This is the probably the most important attribute of a corporation. In contrast, in a sole proprietorship or a partnership, the owners are personally responsible for all of the business debts. If the assets found in the sole proprietorship or partnership are not adequate to satisfy the debt, creditors can go after each owner's personal assets, such as their bank account,…… [Read More]
Knowledge Navigator Tablet PC
The proposed new product that an entirely new venture will be based on is the Knowledge Navigator Tablet PC. Capitalizing on the popularity of tablet PCs including the Apple iPad, the Knowledge Navigator is specifically designed for students. Included as standard are advanced technologies that provide students with the ability to connect to the Internet form literally anywhere while also having a specialized version of the Google Android operating system that automatically backs up their files to storage service DropBox. The EV-DO chipset is included within the Knowledge Navigator as standard, with a comprehensive data plan included in the price. This tablet is differentiated from all the others by being ready to go out of the box by students who need to gain access to online research sources, access databases, collaborate on project teams, and manage all files they are using across all other systems they…… [Read More]
Financial Statements and Business Organizations
Generally accepted accounting principles (GAAP) require four different financial statements for most forms of business organizations: the balance sheet, income statement, cash flow statement, and statement of shareholders, partners' or owner's equity. This essay examines the statements associated with the sole proprietorship, the partnership, the C corporation and S corporation.
A sole proprietorship is a business owned by one person. From an accounting standpoint the business is treated as a separate entity from its owner. A partnership consists of two or more individuals who are co-owners of an enterprise. AC corporation automatically forms when a business becomes incorporated, and shields the shareholders from being personally liable for the debts and obligations of the company (Carter, 2011). The S corporation is a C corporation which has elected pass-through taxation.
A balance sheet provides detailed information about a company's assets, liabilities and equity. It reports…… [Read More]
Legal Structure of McDonald's Corporation
There are many different categories of business in the world today. McDonald's brand franchisees operate as part of a corporation. The company, comprised in part of restaurants run by independent entrepreneurs, is currently considered one of the worlds most successful and largest franchising companies every created. Seventy percent of McDonald's restaurants are owned and operated by independent owners.
This corporate business structure has resulted in substantial opportunities for individual business owners and for the corporation as a whole. The legal structure of McDonald's is discussed below, as well as the advantages and disadvantages McDonald's corporation has over other legal business entities. Though McDonald's corporation operates slightly differently than other corporations in the world today, it remains one of the world's leading retailers, a testament to its strong legal structure.
Legal Aspects Of A Franchise
McDonald's successfully operates as a franchisee corporation. There are many legal…… [Read More]
Legal Forms of Business
There are different business forms that exist depending with the legal attributes that govern them. These business forms have their advantages making them preferred to others in different scenarios. The paper discuses different forms business describing a scenario where preference of these business forms arises.
This is the simplest and cheapest form of business. Sole proprietorships have unlimited liability since the owner is responsible for all debts accruing to the business (Cheeseman, 2010). In this instance, as much as the profits are shared by the owner alone personal assets of the owner can be used to pay the debt owed. The preference for coming up with a sole proprietorship business is seen in the process of decision making, rising of capital and legal requirements such as registrations and reporting. Considering that an individual wishes to open and run a business, the legal requirements will…… [Read More]
Legal Underpinnings of Business Law
Comparison of my personal liability exposure as an owner because of the lawsuit
From a legal perspective, an entrepreneur and a company are similar in a sole proprietorship. The company is not an individual legal enterprise. As the entrepreneur, I am individually responsible for the company's liabilities and debts. In case I happen to breach an agreement with one of the providers, they can sue me. This will make to be personally liable for breach of contract. My personal assets -- home, car, and individual belongings are likely to be in the risk line in case of a court case. In comparison, the lawful liability as a sole proprietorship to the limited liability provided by other company types like the corporation. A corporation is an independent and a lawful entity unique from its owners. Compared with a sole proprietorship, if an organization is found liable…… [Read More]
It covers a specific device or process and it protected by the Patent Act. A patent can be enforced through the legal system. By contrast a trade secret more difficult to protect through the legal system. A trade secret is not generally known to the public whereas a patent is publicly viewable. A trade secret can be protected in states that subscribe to the Uniform Trade Secrets Act, but typically cannot be protected once the secret has been revealed.
There are a number of common encumbrances on title. Some examples are liens, mortgages, judgments, unpaid taxes, clouded title, easements and other restrictions.
A sole proprietorship is a form of business wherein the individual proprietor bears all liability for the business -- the business is not a distinct legal entity. Sole proprietorships are simple and inexpensive to set up and administer. However, the proprietor faces unlimited liability and pays taxes at…… [Read More]
For an entrepreneur, deciding on what form of ownership a business undertaking should take may end up being a rather tough decision to make. This is essentially because each form of business has its own advantages and downsides. In this text, I will discuss four main forms of business including limited liability companies, corporations, partnerships and partnerships.
In Madura's (2006) own words, this is "a business owned by a single owner." In this case, the single owner of such an entity is entitled to all the profits the entity generates. However, such an individual is also responsible for all the obligations the entity might accrue. One of the main advantages of a sole proprietorship is that in this case, the single owner does not share the profits generated by the business with any other individual (Madura, 2006). Further, this form of business is easy to start…… [Read More]
HIT Usability and Design Changes
The situation in this case study revolves around Sally, a member of the Board of Sally Susie's Donut Shop, Inc. (SSDS). SSDS uses an accrual method of accounting and over the past three years has seen volatile sales. Sally is unhappy with her previous tax advisor and wants new advice. Our task is to outline a preliminary interview with Sally to ensure that we ask the right questions.
For tax purposes, it is important to forecast cash flow and income. Sally, in Y1 you posted taxable income of $250k, in Y2 $10k, and in Y3 $150K. Were these numbers based on actual gross sales, or did your deductions and depreciation change drastically between Y1 and Y2?
Was the $50k contribution to a 501(c) charity actually donated, or promised? Was this done with the approval of the Board of Directors?
Based on income, was there a…… [Read More]
Simplest form of business to start.
The sole proprietor can keep all of the profits, 3. Self-Employment
Tax advantages from losses
easy to start this form of business.
Allows two or more people to collaborate in a team effort.
Limited Personal Liability.
Corporations are more capable of growth and expansion than other forms of business.
Corporations have an unlimited life which allows them to continue to exist even if the ownership changes.
All Liabilities fall on the owner.
The life cycle of the business ends when the sole proprietor dies.
Owner may have to use their own assets to pay off the debt of the business
Responsibility for any liabilities incurred by the business is placed on the partners.
Partners are responsible for one another's actions.
Difficult to sell the interest in a partnership.
Corporations are often subject to double taxation.
2. The…… [Read More]
My dream business would be a German Bakery that sells traditional German Bakery and Cafe. I would call it "Heidi's German Bakery and Cafe." I would open the business together with a German nephew of mine who has worked for over 25 years as a master baker in the Heidelberg bakery of my German relatives. The third member of the business would be an American baker who received his professional training at Venieros Italian Bakery, America's oldest Italian pastry shop in New York City that was founded in 1894. Our business would be located in New York City since there is a huge German/European population and only very view places where one can dwell in traditional German baked goods. ifty [to date: sixty two] years ago, when East 86th Street was known as "Sauerkraut Boulevard," there were German bakeries aplenty as well as pastry counters in most of…… [Read More]
Despite these fluctuations in pricing levels, current projects indicate that demand for ginseng will continue to increase in the future due to greater demands from a burgeoning middle class Chinese market (How to grow ginseng, 2012). Although wild-grown ginseng commands higher prices, cultivated alternatives typically weigh more but the Chinese highly prefer the wild-grown version (How to grow ginseng, 2012).
As shown in Figure 1 below, West Virginia is located within the zones (3-8) that are regarded as being especially appropriate for cultivating wild-grown ginseng.
Figure 1. United States Zone Map for Planting Ginseng.
Source: Adapted from http://www.wildgrown.com/usazones.jpg
While West Virginia is located in a highly desirable geographic location for cultivating ginseng, the task is fraught with opportunities for failure, weather conditions can adversely affect the growing cycle, the plants are sparse and difficult to locate, and the actual growing process, as well as its clinical effects, remain better described…… [Read More]
Businesses are the cornerstone of a capitalistic society. Businesses often drive economic growth and overall societal prosperity. In many instances, business can enhance the overall quality of life of those living in civilization. Looking back briefly at history, provides a unique perspective of business as it relates to societal development. Currently, looking at a minimum wage individual living in America today, they are able to perform tasks and activities that many of the wealthiest individuals in society during 1900 could only dream of. The minimum wage individual can watch television, listen to music on a cell phone, use the internet and even control the weather within their vehicle. This has occurred primarily due to the profit incentive embedded in a capitalistic society. The same will occur with Alex, Bill, Carl, Devon, and Xavier as there farm business developments. These same principles are present for all Christians who want their business…… [Read More]
Yet, financial statements and managerial accounting reports can be highly effective nonetheless. Sometimes they will merely confirm what the proprietor already knows, but there are inevitably going to be times when they will reveal that the proprietor's assumptions about the nature of the business are false. Moreover, accounting can act as essentially a second opinion. The proprietor may feel one thing is true, but the numbers can reveal something different.
Overall, accounting is an essential component of any business. Sole proprietorships often make less use of accounting, in part because the law does not obligate them to engage in any more than the most rudimentary accounting. However, proprietors should not overlook the value of accounting. Accounting helps to reveal the business' past performance, but can also be used to enact organizational controls today and to help plant for more effective operations in the future. By understanding the firm's cost structure…… [Read More]
Strategic Plan B&B
Strategic Plan for a New Bed and Breakfast
The long-term mission of the Charmed Bed and Breakfast is to become the best bed and breakfast choice in the Santa Cruz County area directly south of the San Francisco Bay area for temporary lodgings by developing a different experience that capitalizes upon personal service, the historical nature of the Charmed building, and its unique location in one of the most attractive parts of the Central California wine country near historic San Francisco.
It is extremely important for any organization to have a perfect understanding of the marketing mix regarding price. This determining factor is so seemingly obvious, yet so basic to the operation of the bed and breakfast. hat is the highest price that a customer will pay for a room? Setting the incorrect price is often the beginning of the end. It must not be too…… [Read More]
Felipe's inability to speak English would be a liability to the company and a possible safety threat, so he should not be hired as well. That leaves Eric and Michelle, who are both qualified candidates and could therefore both be hired. Even though Eric does not have a high school diploma, his life experience should make up for the lack of education, and he knows how to work a jackhammer. Michelle is perfectly qualified, and cannot be turned down solely because of her (supposed) pregnancy, and is therefore the top choice according to the criteria. However, if either of their interviews provided a legitimate reason to why they would not be able to work, they would not have to be hired.
As a provider for Stonecraft Builders, Paul would do well to incorporate his proprietorship into a corporation. The process would take some time: he would need to file the…… [Read More]
Jasper County has a relatively low unemployment rate and high average wage rate, particularly for this region of the country.
evenue stream will allow for investments in further upgrades and purchase of new mobile home units, thereby making the property even more marketable as an upscale mobile home community.
Currently, mobile home parks account for 79% of "sunbirds" who winter in Texas, making ock Hill an ideal locale (Blais, 2002). In fact, although occupancy rates in Texas mobile home parks were down one percent from the 93% rate in 2000, the total number of such sites increased by more than 7,000 over those two years (Blais, 2002).
Unforeseen downturns in local economy due to plant closures or other major layoffs.
elative low barriers to entry for competitors.
A proforma financial statement for ock Hill's first five years is provided in Table 2 and graphically illustrated in Figures…… [Read More]
Table of Contents (optional)
Louise is aged 50 and single. Since 1994 she has carried on a retail business as a sole trader. Her trading profits as adjusted for tax purposes and after capital allowances, for the year ended 30th April 2009 were $150,000.
The business is carried out from a number of valuable retail outlets, all of which are owned by Louise personally. These units have been acquired over a number of years since 1994 and their market values have increased considerably in recent years.
Apart from her single personal allowance tax credit, Louise is entitled to income tax relief in respect of $10,000, which she pays annually to a evenue approved pension scheme.
Louise's personal living expenses and other financial commitments total $50,000 per annum (including the contribution of $10,000 to the evenue approved pension scheme referred to above).
Louise is considering transferring her business to…… [Read More]
The office and administrative expenses would remain constant even to that point, as would the insurance expense.
Exhibit B: Cash Flow Statement, Year Two
At this point, the business is earning a healthy return and Mr. Ahn is receiving will be able to bring in a reasonable salary. The nature of the business may well change at this point. At the maximum revenue of $144,000 per year the pretax profit would be $63,600. As a result, it is likely that a clinic will be formed with other practitioners in order to minimize expenses and increase profitability.
e did not include taxes in our cash flow examples because the company is going to be set up as a sole proprietorship. This means that the income from the company will be rolled into the income for Mr. Ahn, as well as his liabilities. Mr. Ahn's personal expenses are therefore not included in…… [Read More]
Small Business Growth
Achieving the desired organizational growth is a dream most organizations aspire to realize. Organizational growth entails an increase in the total productivity, sustainability, and competitiveness in the marketplace. Organizational behaviors such as the adoption of the desired culture, leadership style, and effective management of the employees ensure the realization of the desired organizational growth. However, environmental factors such as the adoption of the new technology, constantly changing consumer demands, and stiff competition make the realization process a challenge. Despite these, adoption of the most effective interventions often enables organizations to achieve their objectives (Neale & McElroy, 2004). Therefore, this research paper analyzes a case that involves a small business owner (Kelly) who plans to expand her business.
Kelly should take some steps while organizing and prioritizing her business growth strategies. Mrs. Kelly should consider involving the employees of her business in the planning and prioritization of…… [Read More]
And in these credit-strapped times, he "may be at a disadvantage in raising funds" as sole proprietors cannot issue bonds or sell shares of stock -- they are "often limited to using funds from personal savings or consumer loans" (Sole proprietorship, 2009, Residual Rewards).
Even in terms of his tax returns, the law does not always favor sole proprietorships: some employee benefits such as owner's medical insurance premiums are not directly deductible from business income and are "only partially deductible as an adjustment to income" (Sole proprietorship, 2009, Residual Rewards). There are also different rates of taxation for the two entity types: "a corporation pays 15% federal income tax on taxable income up to $50,000; 25% tax on income from $50,001 - $75,000; 34% tax on income from $75,001 - $100,000; 39% tax on income from $100,001 - $335,000; and 34% tax on income over $335,000" while a married sole…… [Read More]
Uncovering Critical Success Factors for Starting a Small Business Venture
Small businesses have been considered the mainstay in countries around the world. In many European countries for example, the small business has been considered crucial to the success and flourishment of the country in general. Most individuals embark upon a small business venture in the hopes of realizing ownership, independent profits and personal success. Small businesses can prove extremely successful when planned properly. Studies suggest that several small businesses however, close or fail within the first few years of operation. This failure suggests that a majority of small business owners may not have as yet realized the crucial success factors necessary for successful implementation of a small business.
There are as yet, few empirical studies conducted that specifically address key factors for the success of small businesses across several industries. As such, the aim of this paper is…… [Read More]
Interrelationships of Major Fields of Business Management
The purpose of this paper is to explore the interrelationships of nine key areas of a business, and the synergism that results from the interactions of these key business areas. These interrelationships of all nine key areas of a business create a dynamic, successful, and responsive business by capitalizing on the whole instead of the component parts. To illustrate how synergism arises from these interactions, a fictitious business will be used. The business is a new, small retail business that caters to outdoor enthusiasts such as skiers, climbers and hikers. The retail business is located in the Rocky Mountains, and is called Rocky Mountain Outfitters (RMO). Business arises primarily from store traffic, although a limited web presence provides the opportunity for orders to be placed by mail, phone (voicemail), email or web.
RMO was established in the spring of 2004 as a sole…… [Read More]
Knowledge Integration Project
1A) Business owners must take a number of different factors into account when determining the form of business. They have to consider the sources and types of risk that the business takes, if there will be employees, and considerations about raising capital or splitting ownership, which can be quite a complex issue depending on the business. In addition, whether there will be any employees matters. Each jurisdiction has its particular issues, so where the business is situated might be a role in the decision. Certainly, the tax implications of the decision are going to be relevant. In some cases, the cost and ease of setting the entity up might matter -- though such costs can easily be outweighed by liability risks for most businesses.
1B) A sole proprietorship is easy to start, which is its main advantage. Because of that it is mainly a suitable form for…… [Read More]
C corporations file taxes as separate entities, with the owners or partners taking salaries as personal income. Corporate taxes are filed through Form 1120, U.S Corporation Income Tax eturn. This is an advantageous system from some businesses because corporate income is taxed at a lower rate than personal income under a certain level.
S corporations are legally incorporated entities whose tax status is treated the same as an LLC, with business income "passing through" to the owners' and partners' personal income and being taxed at personal income levels. It is increasingly less popular as an option because LLCs offer the same tax structure without the hassle of legal incorporation.
As important as choosing the right legal and tax entity is for a for-profit business, it is even more important for a nonprofit organization. Many nonprofits qualify for tax-exemption, but registering as a nonprofit with the state does not automatically make…… [Read More]
person gives another person some property for safekeeping, that results in a bailment (Sullivan & Sheffrin, 2003). The bailor transfers the property to the bailee, and physical possession of the property must be taken for this legal relationship to occur. This is a common law relationship, and is not a gift or a contract for sale (Sullivan & Sheffrin, 2003). In other words, the bailor is not giving the item away on a permanent basis, and he or she is also not selling the item to the bailee. The only thing that takes place is the transfer of property on a temporary basis (Sullivan & Sheffrin, 2003). The bailment takes place when the bailee both intends to possess and actually possesses the property. Another important aspect of the bailment is that the bailee generally is only allowed to hold the property. He or she does not have any use of…… [Read More]
The original farm was a seasonal operation with periods of no production in the winter months. The ability to dry and produce value-added products will allow the business to smooth its income and realize revenue all year round. The new production facility will change the nature of the business from seasonal to year-round. The business will be able to stockpile product during the busy season and sell it on a continual year round basis.
The owners of the business will be directly responsible for the daily operation of the business. They will make joint decision as a body of shareholders, but each will have their own division to manage and operate. Each of the owners will have a stake and a role in the ability to make this new enterprise a success. They will have knowledge of what is happening on the production floor and will have a view of…… [Read More]
com, p.2). But unlike a corporation, which has many investor-owners in the form of shareholders, an LLC is not considered separate from its owners for tax purposes and thus the owner is not taxed twice, upon his earnings as an individual and what he or she earns from the LLC. In contrast, a corporation is considered a fictive person under U.S. law ("LLC," 2007, Nolo.com, p.2). Also, shareholders have control over the operations of the corporation, while the owners of the LLC have as much control over the business as a sole proprietor.
hat is all this about the different things that determines cash flow?
Cash flow, quite simply, is how much money goes in and goes out of the organization. Cash flow 'out' includes wages, expenditures on equipment, supplies, and maintenance, and must be tracked on a monthly basis. Also, cash flow may vary from year to year and…… [Read More]
Business tructures Overview -- There are a number of different business structures that are available to the new business owner, or someone purchasing a business. Each different structure has its own set of rules, with each having different tax and legal implications. The choice of which to use is thus based on the type of business, its overall legal liability (e.g. A rafting company vs. A resume service), the number of people involved, potential income, and potential longevity.
In business structures, a sole proprietorship is the simplest and is an unincorporated business that is owned and operated by a single individual. All profits and liabilities are the sole responsibility of this individual. This is the most autonomous of the business structures. ole proprietorships have few formalities, few regulations and very little federal, state and local tax issues. However, it also has the least amount of liability protection for the business…… [Read More]
The partners are directly responsible financially for the obligations of the business. Therefore, in case of loss or debts, the owners suffer the risks and losses since they have liability for the business. In terms of complexity and flexibility, the partnerships remain appropriate for the partners. The issue of raising finance is shared between the partners; however, they cannot get loans for the business independently. Therefore, they are not suitable for the two partners who wish to set their business.
The third venture is a corporation, which is a separate entity from the persons that establish the business. Therefore, in financial terms, they are easy to raise capital as members contribute, and can borrow finance independently. Like the limited liability partnership, they are legally bound and hence the liability is limited. They eliminate the issue of personal liability. The tax returns are similar to those of partnerships and are taxed…… [Read More]
Finance -- Finance for Strategic Managers -- Stage
I am a longstanding manager in a family firm which is a small but growing organisation. My responsibility is finance. A new member of the family has just joined the firm fresh from completing a post graduate (level 7) qualification at college. He is clear that in order to ensure the business's continued success he must develop the financial skills required to assess and manage finance within the business. He wishes to begin by understanding the role of financial information in business strategy and given my experience he has asked for my advice. He intends to create a file on finance for strategic managers which he can use as an aide memoire.
An Assessment Of hy Financial Information Is Needed In Business
Business often turns on decision making and effective decisions need financial and non-financial information. Financial information, which…… [Read More]
This is one of the most difficult types of structures as far as agency law is concerned because an LLC can resemble a sole proprietorship or a corporation depending on the structure and daily management. There are many variations in the way an LLC is managed.
There are two basic types of corporate entities, an S corporation and a C corporation. An LLC, S corporation, and a C corporation can act as entities in and of themselves. The differences between the S. And C corporation have to do with tax structures, but in many other aspects they are identical. They have the right to conduct business as if they are separate from the individuals within them. This means that the corporation can also incur legal liability arising from the actions of one of its representatives (Thompson, 2003). These are the basic forms of corporation in the United States. However, there…… [Read More]
LLC v Partnership
Two different forms of business organization are limited liability corporations (LLC) and partnerships. There are some significant differences between the two. Understanding these differences and their ramifications is essential to making the best decision for a new company that is just starting up.
A partnership is a form of ownership where the responsibility for the company is shared among two or more partners. The profits from such a company flow through to the income of the partners, so are taxed at the individual tax rates of the partners. The risk that the company has is also borne by the partners. Thus, there is unlimited liability on the ownership, as well as unlimited risk with respect to the profits or losses of the company. How this risk is portioned to the different partners is something that is outlined in the partnership agreement. Yet, it is worth noting that…… [Read More]
Owen should open Owen's Pet Store as a sole proprietorship, as this will provide him with the greatest freedom and flexibility during his initial period of slim earnings and his planned but uncertain expansion (Cross & Miller, 2012). This does leave Owen somewhat exposed in terms of risk to his personal finances, but from the brief details provided in the case it appears as though he is in a highly flexible position and is ready to invest himself and his finances in the business, and thus a sole proprietorship would not carry unnecessary risk for him. This would free Owen from any consideration to investment partners and would limit his costs to the government, and though he does not expect to turn a profit for two years as long as he keeps the overall debt level to a minimum he should be able to walk away with relatively little damage…… [Read More]
Considerations for a Business Plan; Structure and Financing
Setting up a new business can be daunting; making the right decisions during the planning stages may prevent later problems. Two main issues are whether or not to take on partners and how to finance the venture. This requires consideration of advantages and disadvantages associated with different firm structures and the potential sources of financing that may be available.
There choices are sole proprietorship, partnership, limited liability company, and corporation. The sole proprietorship is one of the simplest, and also one of the most common business structures, and is administratively simple as the business is not have its own legal identity, but is an extension of the business owner. In this type of business there will be a single owner, which has some advantages; the owner has total control over the business, and as the income is classed as the individuals'…… [Read More]
Organizational reframing plan
Organizational reframing is an essential part of every organization's corporate lifespan and strategizing. It is more than mere cosmetic change: it forces organizations to fundamentally reconsider their basic values and capabilities from the ground up on a structural, human, political, and symbolic level. Reframing is a multidimensional process, although all three reframing levels must be integrated. The leader has a critical role to play because of the holistic nature of the reframing. However, the human resource department must also be 'on board' with the changes, given the importance of people in creating new organizational attitudes and processes.
The reframing process must take hold in all facets of the organization. It is a process of organizational learning, in which change that begins on the individual level gradually begins to take root in the entire organizational culture. The culture must engage in self-reflection about how it works, rather…… [Read More]
Accounting for Partnerships
Partnership is a legal business relationship between two or more people who agree to do business for the purposes of earning profit. It is considered as the most appealing option in setting up a new small scale business and growing it with the passage of time. In this business relationship, all the partners share profits and losses in an agreed ratio while assign the decision making powers to the partners who are more competent and experienced than the rest (Needles, Powers, & Crosson, 2011).
The creation, operations, and liquidation processes of a partnership firm are quite different than those of a sole proprietorship or a joint stock corporation. Therefore, it has its own advantages and disadvantages that must be kept in mind while partners choose to engage together and share profits and liabilities.
The following sections discuss all the major aspects of a business partnership;…… [Read More]
court, it will be a state court. Each state has different laws with respect to how they treat LLCs in such situations. Without knowing the state, it is impossible to know which statute a state might apply. There can be significant differences between state law on this matter (Garon, 2008).
In most states, it will be difficult to adjudicate such disputes, insomuch as there is likely to be limited precedence (Garon, 2008). If the court uses the Uniform Limited Liability Company Act, it would turn to the language in Section 112, particularly subsection D. The relevant text is as follows: "Absent any contrary provision in the operating agreement, language in an LLC's certificate of organization might be evidence of the members' agreement and might thereby constitute or at least imply a term of the operating agreement." If there is nothing written down at all, the court is likely to find…… [Read More]
ut neophytes should not attempt to do this. Halved coconuts can be dried in one of two ways. The first is by letting them dry by the heat of the sun, which takes a longer time. The other and faster way is by heating them. A bamboo house or shack without walls is built at about 3 feet above the ground. It has only a roof and a floor. The halved coconuts are piled on the floor. Some coconut husks are piled beneath the shack but not too close to burn the shack. A torch is used to set fire on these piled coconut husks but they are monitored carefully. More fire is set if it turns low. The halved coconuts turn brown and separate from the shells when ready for scooping. Just enough heat from medium to low is used to avoid burning. When the fruits at the bottom…… [Read More]
CADWAE: Case Study
Did CADWAE have genuine BFOQs (Bona Fide Occupational Job Qualifications) in its ad?
Do not forget to review the company's slogan as given in the above facts.
Be sure to discuss Petunia's point-of-view as well as CADWAE's position and defenses.
Use legal authority to support your position as well.
In general, it is illegal to discriminate against a job applicant based upon characteristics pertaining to "race, religion, gender, national origin, age or other protected status" ("BFOQ," 2015). However, in certain limited circumstances, if an employer can demonstrate that "no member of the group" he or she is discriminating against could perform the job, he or she may do so, under an exception known as Bona Fide Occupational Job Qualifications ("BFOQ," 2015). For example, airlines may have mandatory retirement ages for pilots because of safety concerns; religious institutions may favor candidates of a particular religion; and modeling and…… [Read More]
Accounting for Partnerships
Businesses can be classified into various forms of ownership. In this text, I concern myself with partnerships. In so doing, I will discuss partnerships and the various advantages as well as disadvantages associated with this form of business ownership. Further, I will also highlight the Financial Accounting Standards (FAS) governing accounting for this form of business ownership from creation and operation to liquidation. Partnerships' tax consequences will also be discussed.
Partnerships: Advantages and Disadvantages
Just like any form of business ownership, partnerships also do have several advantages and disadvantages. A partnership according to Needles, Needles and Powers (2010) is "an association of two or more persons to carry on as co-owners of a business for profit." In that regard, a partnership is formed when two or more people come together with an aim of initiating a business activity. Individuals may be motivated to start a partnership form…… [Read More]
By implementing safety training immediately, Joe will be complying with state laws but also reducing future risk on the job for his team. Also this can reduce his overall risk as the owner and help reduce insurance fees.
The element of change has played a far greater role than expected in the American economy. A shift will continue and not focus so much on corporate America but on smaller, independent firms and also small business owner demographics such as Joe's company. These segments will explode over the next ten years as more employees become disillusioned by American corporate culture. Today's small businessperson carries a greater amount of responsibility on their shoulders but due to recent poor business practices, one cannot help but sense an air of distrust for corporate America. One wants the control of taking care of one's own businesses. The possibilities for these segments are endless due…… [Read More]
he field of finance largely concerns itself with investment analysis and the management of funds. he fields of accounting and finance are distinct from each other. Essentially, finance, from the occupational perspective, has largely got to do with the efficient procurement and utilization of funds. On the other hand, still from an occupational perspective, accounting largely concerns itself with the examination and analysis of financial data, and preparation of financial statements. It should, however, be noted that the roles of both professions do in some cases overlap. Indeed, accounting according to Khan and Jain (p. 1.5) should be viewed as a finance sub-function.
In a typical corporation the finance function is divided into two divisions, or departments. What are they? What does each department do?
he finance function is typically divided into the financial accounting and management accounting divisions. Management accounting in the words of Drury (2006, p. 7)…… [Read More]
You plan to open GlutMax!, a full-service gym with solarium, health and beauty expertise, and personal trainers. You currently have $50,000 available. You estimate you will need $100,000 to start and operate the gym for 1 year. You also estimate you will need $25,000 a year for re-investment, assuming no growth. You plan on being the sole owner if possible, and having two managers: one for the technical side and one for the business side. You are well-known in the community and could obtain a loan since you have successfully been in business before. You could also find people to invest in your gym, but you don't like the idea of losing control. You have already started finding suppliers and buying equipment for your new venture. Your friend, Flicka, has agreed to do much of the footwork, in terms of applications and filings with the state, for a…… [Read More]
These costs are less obvious than direct costs, but can be an important factor in organizational competitiveness ("Project managers," 2003). As an example, long lead times for hard-to-find, specialty resources can result in additional hidden costs. These include the costs of warehousing extra resources, to compensate for these long lead times. If production runs short of these resources, and they are not readily available, this can result in stopped production. The lost productivity results in increased overhead costs as a percentage of production. This can then lead to reduced competitiveness, resulting in reduced revenues, and an inability to continue to take advantage of economies of scale, for not only that particular resource, but also all other resource inputs for that product or service.
The consequences of obtaining resources for an organization are both external and internal. Externally, the primary consequence is that that resource is no longer in the environment…… [Read More]
Tose additional taxes are determined at te local level, but Clark County does not impose tose additional taxes. Indiana is also one of te states tat impose state income taxes; terefore an employer in Indiana must prepare witolding information for its employees. Te general requirements of state income tax witolding in Indiana may be found in Ind. Code § 6-3-2.
Finally, in Indiana, business licenses and permits are a matter of local and county law, and tose requirements will be examined in te local law section.
Labor and wage issues are of major concern to employers and are covered by a wide range of laws, ranging from occupational safety issues to weter or not an employer can loan an employee money. An employer must understand all of tese laws in order to be in compliance wit state labor laws. Indiana maintains a state minimum wage, wic is governed by Ind.…… [Read More]