《Module 38-Business structure (Sole Partnership LLC)》.doc

Module 38 Business Structure About 20% of the BEC exam Sole Proprietorships Partnership general partnership 一般合伙 新的加入者对以前的负债最多承担以其资产为限的责任 Limited Partnerships Joint Ventures LLC 变种，杂交 LLP Corporation C和S Sole Proprietorships For the exam, it is lightly tested0 A sole proprietorship is the simplest form of business ownership. A sole proprietorship is a business owned by one person. The owner may operate on his or her own or may employ others. Advantages: Informality 无限责任，债权人有权向我个人的资产追溯 Nothing need be filed with the state in which the business operates unless the state or city requires a business license. If a fictitious business name is used, then many states require publishing the true name of the business owner. Personal Liability The sole proprietor of the business has personal liability of the debts incurred by the business. Life of the entity A sole proprietorship cannot exist beyond the life of the sole proprietor. Tax corporation 是 taxable，公司盈利要征税，派发出去的股利也要征税的。双重多重 For tax purposes, profits and losses from the business flow through the business to the sole proprietor. Think about the Schedule C self-employment in the 1040 form in the REG exam. Bankruptcy A sole proprietorship is not considered an entity separate from the sole proprietor; therefore, a sole proprietor would have to file for bankruptcy personally under the Bankruptcy Code. Taking all profits A sole proprietor one takes all the profits of the business and a sole proprietor usually has a quick decision process and doesnt have any opposition when making a decision as he or she has total control of his or her business. All profits and losses accrue to the owner. Disadvantages A business organized as a sole trader will likely have a hard time raising capital since it has to make up for all the businesss funds. The owner of the business has unlimited liability as he is responsible for the businesss debts because he has control over the business. A disadvantage of a sole proprietorship