QST LA 245 Lecture Notes - Lecture 6: Sole Proprietorship, General Partnership, Double Taxation
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Document Summary
Things to consider when deciding business forms: liability protection, tax treatment, ease of formation/maintenance, ability to raise capital, making a positive impact on society and the environment for those of you interested in benefit corporations. An unincorporated business owned by one person (72% of all businesses) Can run a business without taking any formal steps. Not required to register with the government. Not required to file a separate tax return. Owner responsible for all of the business" debts. Owner has limited options for financing the business. An unincorporated association of 2 or more co-owners who operate a business for profit. Pros: taxes pass through to each partner. Cons: liability -- a partner is personally liable for the debts of the enterprise and for the acts of the other partners. Regular corporations account for about 18% of all businesses. Protects managers and investors from personal liability for the debts of the corporation and the actions of others.
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