If the business has debt that is unpaid then the creditors could go after the individual. Same is also said if the owner has debts separate from the business debt the creditors could go after the business. As a sole proprietorship business, liability insurance could be purchased to deter this. • Income Taxes- As a sole proprietorship business, a person can avoid the higher taxes that are associated with corporations. A sole proprietorship business can also deduct business expenses just like any other business.
All profits earned by the company are considered personal income of the sole proprietor. A schedule C is completed along with Form 1040 for the sole proprietor’s personal income tax return. The sole proprietor is also able to write off the cost of doing business on their taxes from actual expenses to losses to depreciation of business equipment. One of the biggest advantages in a Sole Proprietorship is that the sole proprietor has total and complete control. There are no executive boards, no partner, and more importantly no boss.
It is important to remember that financial statements must be presented fairly and in accordance with accounting principles as it is evident here that there is a bias towards presenting statements in a financially strong way. Another important user is the controller, Liam Hanlon who is a potential shareholder. As a potential shareholder, he may wish to present financial statements is such a way as to make it seem as if the company is not a very attractive investment to deter other potential investors and to be able to purchase shares at a lower price. Another slightly conflicting interest would be to prepare accurate
However, it will increase Johnson's current tax liability. There is usually no advantage to an S-corporation for a wealthy individual who is already in the top tax bracket. S-Corporation income tends to favor start-up businesses and taxpayers with little income, because the corporation is taxed at the individual's lower personal income tax rate. Should Mr. Jones merge Johnson Services with Smithon? What
“A manager’s responsibility should be to the shareholders alone.” Discuss this view (12 marks) Corporate social responsibility refers to a business choosing to go above its legal obligations relating to society and the environment; this can be done by including factors such as Fairtrade or good working conditions for employees. However, some people argue that managers should only consider shareholders when making decisions and thus avoid CSR. In recent years, CSR has becoming increasingly revered on a global scale and therefore it’s becoming much more significant. For a business such as Greggs to breakthrough in foreign countries they would need to maintain their brand image to maximise success and therefore they should consider their other stakeholders such as employees and suppliers. This could be approached by making sure that their retail outlets in other countries are attractive and have good working conditions for their workers.
When utilizing the online services, the consumers want to be ensured that their personal information is secured, and to easily maneuver through the website. Problem Statement McBride Financial Services experiences multiple issues within the organization due to the lack of solid corporate governance policies, unethical attitudes and actions of Hugh McBride, CEO, and a lack of open communication. In an effort to correct the issue, this company will incorporate the ethical procedures defined by Beltway and will follow all governmental policies and financial reporting regulations while integrating state-of-the-art technology to ease consumer use. End-State Vision The mission statement is simple: “McBride Financial Services will be the preeminent provider of low cost mortgage services using state of the art technology in the five state area of Idaho, Montana, Wyoming, North Dakota, and South Dakota” (Apollo, 2003). McBride’s philosophy is to achieve excellent customer service by providing the “most efficient and effective processing of mortgage application from inception to closing” (Apollo, 2003), and the goals are to break even financially, gain profitability in one year, and to update the technology being used to “minimize costs and maximize efficiencies for customers and the business” (Apollo,
In order for a corporation to become incorporated it must follow the general corporation of the state. An advantage of a corporation is that it is its own legal entity and thus does not hold any legal or monetary liability on its shareholders. In a limited liability partnership, the partners are only liable for the amount of monies invested in the organization, however that is not the case with a corporation. In a corporation the share holders bare “NO” liability at all. The downfall of a corporation is that of double taxation.
Delaware Corporation Law Have you ever wonder why majority of the fortune 500 companies has chosen to incorporate their business in Delaware? Well it’s not because of taxes, although Delaware like every other state tries to keep its corporate tax rates low and competitive. There are a few advantages why companies decided to incorporate in Delaware, for instance; • As a state that welcomes corporations with open arms, Delaware provides such financial incentives for corporations as freedom from personal property tax, intangible property tax and even sales tax. A bigger incentive is the absence of a corporate income tax, provided the corporation is not doing business within the state. Furthermore, Delaware corporations pay
PART A (the report) SOLE PROPRIETORSHIP: This is the most common form of doing business within the United States. In this type of business there is one owner and no separation exists between he owner and the business. As owner, you are entitled to all profits, and you are responsible for all losses and liabilities incurred by the business. Having full freedom to act as you will is a strong advantage to forming this type of business. Liability: As mentioned above, in a sole proprietorship the owner is held accountable for any liabilities attributed to the business.
As a result, the wealthy must assume the responsibility of distributing his fortune in a way that it will be put to good use, and not wasted on thoughtless expenses. In this, Carnegie represented a caption of industry who had risen to power by his own hand and refused to worship wealth. I agree with this assumption because this system would be a good way to help those who are less fortunate. Carnegie based his philosophy on the observation that the heirs of large fortunes frequently squandered them in riotous living rather than growing them. Even giving one's fortune to charity was no guarantee that it would be used correctly, since there was no guarantee that a charitable organization would actually use the money pursuant to one’s wishes.