Chad and Dad
The types of businesses that a handyman business can consist of are including a sole proprietorship, limited liability corporation (LLC) or S Corp. A sole proprietorship is when it is owned and operated by the same human being. Some of the advantages of a sole proprietorship is that it is more complicated than a regular corporation. It is less expensive to start up and can be formed without the hassle of the tax standards that most regular corporations face. The owners don’t have to file business tax report. They in turn file their business information within in their own tax report, so this makes the rates taxed on personal income. The owners can hire employees which can help expand job creation. Their spouses can become employed without even trying and even married couples can start sole proprietorship together. Lastly, in sole proprietorship the owner is in total control and can make changes to it at any given time. The disadvantages of a sole proprietorship is that liability is something that the owner is responsible for and problems or financial problems. As for the taxes, the owner has to also pay self-employment taxes. There is no continuation of ownership if something happens to the owner. Lastly, there can be issues to raise or increase capital.
Limited liability partnership is when a business provides protection for the partners involved against negligence of partners in the business. Some of the advantages is that it provides the limited
As a hybrid of partnerships and corporations, LLC’s provide limited liability for debts and flexibility to be taxed as a partnership or corporation (Staring and Naming a Business Presentation, 2012, Slide 5). Some specific advantages include being empowered authorities in the management of the business, diversity of members, limited liability, pass-through taxation, and less paperwork (appreciated by many). A drawback of this business structure is the need for a tailored operating agreement that specifies the specific needs of the
Limited company is an organisation in which allow you set up and run your business. Any profits which are made within a limited company stays within the company after it has paid corporation tax, which then allows the company to share its profits.
Limited liability means it does not exceed the amount invested in a partnership or limited liability company. The limited liability feature is one of the biggest advantages of investing in publicly listed companies. While a shareholder can participate wholly in the growth of a company, his or her liability is restricted to the
• PROFIT RETENTION – Limited partners usually receive a specified amount of profit that is predetermined in an agreement or based on the contribution of the partner. • LOCATION – Limited partners have no say in expansion or relocation of the company in which they are partners with. • CONVENIENCE/BURDEN – One convenience of having limited
Convenience/Burden- Like a general partnership a limited partnership is easily formed and can enjoy pass through-taxation. It can also be easier to get financing with a limited partnership. A downfall of the limited partnership is that the death of a general partner can dissolve the partnership unless a prior agreement has been established.
Control- A limited partner has no say in the running and management in the business. The general partners will have the ability to run the business as they see fit.
3 • Control – A major disadvantage of the limited partnership becomes obvious when discussing the actual management of the general partnership. Limited partners have no control of the day-to-day operations of the general partnership. Profit Retention – The limited partner receives an agreed portion of the profits that typically reflects the percentage of the amount that has been invested into the general partnership. Location – If the general partners expand or move into another state, the burden of regulatory requirements is solely on the general partners and not the limited partners. If the partners plan to move or expand into another state, they simply need to file a new DBA in that state. Convenience / Burden – A
* Limited partnerships have the convenience of allowing multiple investors as limited partners to assist with cash available to run the business and support improvements or other investments into the company. The burden of running the business falls on the general partner.
Convenience/Burden: Limited Partnerships have extra requirements placed upon them to comply with state regulatory requirements. They must maintain a registered agent to represent them in the state in which they were formed. They are also required to file an informational report with the IRS of the profits passed to the general partners.
Sole Proprietorship would give you complete control since you assume all the risks, which mean you get all the profits, but you also suffer all the losses and liabilities. There is little to no paperwork to be done with a sole proprietorship. You only pay personal income tax to include Social security. The business doesn’t have to file a tax return, but you are still liable for payroll, unemployment and compensation taxes (Clarkson, Miller, & Cross, 2016).
Tinker & Tailor’s Home Security Service: “The limited partnership form of business organization was primarily created to address one of the worst shortcomings of the traditional partnership form: unlimited personal liability for financial obligations incurred by the partnership” (Seaquist, 2012). Those involved in a limited partnership are in a unique situation in that they are only legally responsible for their investment in the partnership
Due to limited liability, company creditors’ interests are not protected . Creditors need to bear the risks inherent when dealing with limited company. Shareholders are discouraged from monitoring and controlling the business due to the benefits of limited liability.
Limited liability Company (LLC): Business’ owners are only subject to limited liability for company’s debts and actions. Owners will be only liable for their own mistakes or negligence that they may show in occasions.
Firstly, even though there are different types of partnership such as general, limited and limited liability partnership. This three different type has its advantages and disadvantages however we will be mainly focused on general partnership. One advantage of the general partnership is raising capital due to the nature of the business the partners will raise capital to start-up the business. Therefore more partners mean more capital can be put to the business, this allows the business to have more potential for growth and profitability. Another advantage is that a partnership is less complicated to form and run than a company they don’t have legal filing requirements, this means they don’t have to file accounts and documents with Companies House.
LLP is combination of limited liability Company (private ltd. company) and partnership firm and it has advantage of both of these. Due to its flexible nature LLP is preferred by small, medium business organization, service sectors and professional. It is one of the easiest business structure to manage and incorporate in long run.