The Case Of Jeb And Josh Their Business

| A sole proprietorship is easy to create; there is minimal creation cost and time.The single owner has autonomy in decision making; sole owner makes all decisions related to the business and has complete ownership of business’s finances.

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.

There are three types of business entities: sole proprietorship, partnerships, and corporations. Sole proprietorships are businesses owned by an individual person. They are easy to form, but are not taxed. Instead the individual business owner is taxed on any monies acquired on behalf of the business (Kubasek, 2012. Partnerships are businesses that are owned by more than one individual owners. The big thing about partnerships is that each partner is personally responsible for the acts of the other partners in the business . (Kubasek, 2012 Corporations are businesses owned by multiple people to include shareholders (Kubasek, 2012). They can sue and be sued and are subject to a host of rules and regulations set forth by the government.

When looking at liability, creating an LLC will limit the owner’s exposure to just his invested amount. This will legally shield his home, bank accounts, family’s property and other personal assets from seizure or liquidation in the event the company is held responsible for any of the situations mentioned, such as a cabinet falling or subcontractor failing to perform. It would also protect him in the event the expansion of his company fails, and a worst case scenario of the company going under.

A limited liability company protects each partner from personal liability for certain obligations of the company. An important difference from other partnerships is that each partner is liable for the debts and obligations of the partners. With limited liability Company, each state has its own laws governing partners for these vessels. Some states allow only certain professions, such as lawyers and accountants to form LLP. Some states only provide protection from liability for negligence claims, leaving personally responsible for other types of requests partner. For tax purposes, profits are divided equally between the partners and the partnership is not taxed separately.

A limited liability company consists of a single owner, or sometimes more than one owner, and are not taxed as separate business entities. All profits and losses pass through the business to those who own the company. Owners must report profits and losses on their personal tax return filing as a corporation, partnership, or sole proprietorship. If the LLC is ran by a single owner, they file a 1040 Schedule C form as a sole proprietor. Partners file a 1065 form consisting of a partnership, and a form 1120 is filed if the LLC is filing as a corporation. The LLC must be registered such as the State Corporation Commission, Department of Commerce and Consumer Affairs, Department of Consumer and Regulatory Affairs, or the Division of Corporations and Commercial Code. The great thing about an LLC is that the owner has freedom in management. The owner is able to run the organization as they see fit not answering to anyone,

Limited Liability Company (LLC) combines the tax advantages of a partnership with the limited liability aspects of a corporation. LLC’s are governed by the Uniform Limited Liability Company Act (ULLCA). All members of the LLC enjoy limited liability unless there is serious misconduct is committed by said member(s), or a member fails to follow through on an obligation. All this should be outlined in your preformation contract. You will have more flexibility with taxation and options on how to manage the company. It would be advisable to also have an Operating Agreement. This will dictate how management will be hired and fired, division of profits, how to transfer interest in the event a member chooses to opt out or dies. What steps to take in the event of dissociation of a partner, and if it causes the dissolution of the LLC. Most importantly how the members vote in the LLC. The weight of the members vote is in accordance with the member’s capital

Sole Proprietorship: A type of business that is owned by and run by one person with no legal difference between the business and the owner. It is easy to form with no cost or time to initiate. It gives the owner the ability to self-govern the business. There are drawbacks; only one owner can be established not allowing a partner. Also, unlimited liability puts the owner’s personal assets in jeopardy with the creditors.

The last of the four types includes the limited liability company, also known as a LLC. An LLC is an unincorporated form of business that carries characteristics of all of the other three forms of business. An LLC can choose to be taxed as a partnership, the owners can manage the business, and the owners have limited liability for debts and obligations of the partnership. LLC’s are

iA Limited Liability Company (LLC) is a business structure allowed by state statute. LLCs are popular because, similar to a corporation, owners have limited personal liability for the debts and actions of the LLC. Other features of LLCs are more like a partnership, providing management flexibility and the benefit of pass-through taxation.

I agree with you, the best business structure for Arcadia would be an LLC. With the LLC both Jeb and Josh will have exceptional protection against any lawsuit. An LLC is a legal entity separate from its owners. The owners are not personally liable for the LLC’s debts or legal liabilities. The owners may lose only their contributed capital, unlike a sole proprietor or partnership, any legal obligation usually does not put the owners’ personal assets at risk. There are situations where the owners could be liable, for example if the owners personally guarantee a business loan or fail to use due care that results in a breach of the duties to the

LLCs provide some liability protection to their owners, who are generally not personally responsible for the business debts and liabilities of the LLC. Creditors cannot pursue the personal assets of the owners to pay

Is the most common business type, where the business is operated and owned by a single individual. In this type of business, the sole proprietor provides capital, does not share profit or loss and runs the business alone. As such, the business and the owner are indistinguishable for tax and legal purposes (Dlabay, 2011). To differentiate this business from other business types, a sole proprietorship is discussed under the following characteristics.

A limited liability company is a type of company that has the dividends benefit of a partnership and the minimal liability benefits of a corporation. LLC’s are mainly beneficial to the

The sole proprietorship is an unincorporated business where the owner will pay taxes on all income that is received from the firm. They will assume any legal and financial responsibilities that are incurred during this process. The biggest advantages are that very little paperwork is needed to begin operations (most notably: state and local tax / business licenses). The largest drawback is the owner is responsible for all debts of the firm. ("Sole Proprietorship," 2012)