Lit1 310.1.2-01-06

In: Other Topics

Submitted By Amtytus
Words 3366
Pages 14
Ashley T

LIT1 Task 310.1.2-01-06

Part A

Sole Proprietorship – As a sole proprietor, you are your own business entity. You own and run your company, which means you are in complete control and assume sole responsibility of all legal and financial matters.
• LIABLITY – There is no differentiation between the business and the owner, as they are one in the same. Therefore the business/owner takes full accountability and has limitless liability for all gains and losses the business obtains.
• INCOME TAXES – All business revenue and overhead are considered personal income and have to be reported as such to the IRS on taxes as they cannot be taxed separately.
• LONGEVITY/CONTINUITY – The business is only in existence while the owner is actively running it. Should the owner retire or pass, the business ceases to exist.
• CONTROL – Since the business has one sole owner, it cannot be passed on to another individual for control.
• PROFIT RETENTION – The business/owner retains all revenue.
• LOCATION – You are not restricted on where you can operate your business. Depending on the states you expand to, you will be required to register your business with the state agency so it is known who is liable for any incidences. However, if you decide to use your name as the company name, most states will not require any registration. You just need to check with the state agency for their policies.
• CONVENIENCE/BURDEN – The business can be established just by doing business. As long as you follow state requirements based on the industry of your business, i.e. permits, registration and licensing, the business is formed as soon as you start conducting it. With that being said, there is no distinct difference between the business and the owner as they are the same, so you are 100% liable, both legally and financially for any issues.

General Partnership – A…...

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