SOLE PROPRIETORSHIP

Question 1

Sole Proprietorship

Know the requirements, advantages, disadvantages

Answer 1

Requirements: Name of business and location, company stationery (letterheads), legal and financial consequence, level of risks owners want to take

Advantage: total management by the owner, possible tax adv. with business expenses being deducted from income business.

Disadvantage: owner is liable for company’s debt, being sued means owner’s income, property an other assets can e seized

Taxes - No Seperate federal tax return filed or taxed incurrred

        - File schedule C (Form 1040)-Profit and losses from sole proprietoriship every business 
          quarter

Question 2

General or Limited Partnership

Know the requirements, advantages, disadvantages

Answer 2

Requirements: Two or more people in managements, profits and risk of business.
Income is shared and reported on personal taxes
Advantage: Liability for malpractice is limited to the person repsonsible
Limited Liability Partnership