The business is not required to file taxes, as the business and owner are considered one. Longevity or continuity: In a sole proprietorship should the owner die the business will typically lose their value. The owner can leave their business to an heir in their will, however there are many tax problems that can arise if the estate is not planned correctly. Control: In a sole proprietorship the owner is the person who has registered the business. This individual is in charge of managing the business, and has all control and makes all decision concerning the business.
Running head: Business Law Rachel Lavender Western Governors University 2/21/11 PART A Sole Proprietorship A sole proprietorship is how most business entities begin. This type of business is owned and operated by one person. The main advantage of this type of business is that the owner does not need to get the approval of a partner or board in order to make decisions. A significant disadvantage is that, in a sole proprietorship, there is no separation from the business and personal assets, therefore, there is unlimited personal liability to the owner’s personal assets. · Liability-There is no difference between personal and business assets.
When partners can't get along and suffer from disagreements the business suffers. This can contribute to the businesses inability to stay together as a cohesive organization. Control of the business is in the hands of each of the partners and percentage of control is stated in the contract agreement at the start of the business. All partners have equal voting right regardless of how much money the contributed to the business. Partnerships, like sole proprietorships, can do business in other states
* Control: Because there is only a single owner, a sole proprietor has control of all aspects of the business. The owner makes all of the decisions in how the business is to operate. * Profit retention: A sole proprietor keeps all profits of the business and does not have to share them with another individual. If the sole proprietor employs others, then it is the responsibility of the owner to pay the employees. * Location (expansion): Relocating to another state for a sole proprietorship is simple.
Business is even viewed by some as being the vehicle for contributions to worthy causes. Yet business should stay away from negative impacts such as discrimination etc. He suggests the premise that business is for profit and the provision of goods and services. Profit is the only ethic responsibility for business according to Milton Friedman. Camenisch’s view is that the goods and services are the center of the business ethics for they promote the profit.
It does matter how small or big a business transaction is the law makes available a way for everyone to understand his or her duties and obligations. Corporations depend on the meanings of law to safeguard their business transactions while handling business relations. Legal counsel, arbitrary contracts, order, safety, establishing a good relationship with consumers, vendors, etc. are a few functions of business law (ehow.com,
A sole proprietor however does not necessarily have to run the business him, the owner can have others oversee and run the operations of the business just not as a partner, the owner is the overall decider of what will happen and will dictate the businesses future. This type of business form is the most widely used throughout the country, however it is not a form of business that is necessarily run with a large employee count. Rather it tends to be used with companies of one-person or a small number of employees. Advantages * Simple – start up is basically easy; the only legal item needed at first is state or local permits and licenses. If you want the business to have a name other then your given name you can file a request for that.
Under law the employee is not required to pay any taxes and will have to pay capital gains tax. The second stock options is called a nonqualified stock option (NQSO), which this type of option doesn’t receive any type of special incentives and is the same as a cash compensation. The member is required to pay payroll, income tax, and capital gain tax if the stock is sold. (Kaplan, Warren, 2010). 2.
Claude and Jacky have heard that partnerships have “unlimited liability‟ and that each partner in a firm has actual and apparent authority to bind the firm. What do these things mean? Unlimited Liability is that the partners of the business are equally liable in most circumstances if proven to be in the wrong. There is also no capped maximum for the unlimited liability hence the name. Each Partner acts as an agent for each other in the absence of the other partner.
Free market economy is also characterized by free trade without any tariffs or subsidies imposed by the government. The most fundamental concept of a free economic system is personal freedom. A free economic system assumes that people will benefit from the actions they feel most compelled to take. Working from this central idea, a free economic system allows people to form cooperative relationships that benefit both sides so people are not forced to do anything they do not wish to do. A free market also ensures that people can run their business in whatever way they see fit, without being disadvantaged by outside forces.