LEGL 225 Lecture Notes - Lecture 8: Girls, Inc.

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lemonyellowjacket182

13 Apr 2016

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Do you want a corporation or a limited liability company: llc is much simpler. How many owners is the business going to have: llc is better for only a little bit of owners, corporation is more for companies with a lot of owners. Picking out a name for your company. You need to make sure you can claim the name: check if there is another business in your state that operates with the same name, the other business can sue you, so you need to be careful. When you pick up a name it with have the company then ,llc: ani"s girls, llc limited liability company, ani"s girls, inc. corporation, ani"s girls, corp. corporation. File the articles of organization with the state department of assessment and. Taxation (sdat: the articles of organization lets the whole world know your business exists. The articles of organization can be prepared by you or your attorney.

Related Questions

Match Column A with Column B

1) Partnership	a) a business owned by one person who is personally liable for all losses
2) Proprietorship	b) An artificial being created by a state
3) Limited partnership	c) two or more persons combine their efforts for a single transaction
4) Corporation	d) created when shareholders elect to be treates as partners for tax purposes
5) legal capacity	e) created by an agreement between two or more persons who agree to share profits and losses
6) buy-and-sell agreement	f) provides for compensation to a deceased or withdrawing owner of a business in return for that owners interest.
7) Subchapter S corporation	g) the ability of an organization to sue or to own property
8) joint venture	h) exists when some partners are treated like shareholders for liability purposes
9) limited liability company	i) tax doctine that allows income to be taxed at the owner level, not the organization level
10) "pass through"	j) owners recieve limited liability and tax treatment as if they were a partnership without filing as a corporation.

Regulations are

	A. equal in authorityto legislation if statutory
	B. equal in authorityto legislation
	C. presumed to bevalid and to have almost the same weight as the IRC
	D. equal in authorityto legislation if interpretative

2) Which of the followingstatements regarding proposed regulations is not correct?

	A. Practitioners andother interested parties may comment on proposed regulations.
	B. Proposedregulations expire after 3 years.
	C. Proposed andtemporary regulations are generally issued simultaneously.
	D. Proposedregulations do not provide any insight into the IRS'sinterpretation of the tax law.

3) Identify which of thefollowing statements is false.

	A. Members from boththe House and the Senate are on the Conference Committee.
	B. When tax advisorsspeak of the tax law, they usually have in mind just the InternalRevenue Code.
	C. Records ofcommittee hearings are helpful in determining Congressionalintent.
	D. All arefalse.

4) Which of the followingstatements about a partnership is true?

	A. Partners are taxedon distributions from a partnership.
	B. A partnership is ataxpaying entity.
	C. Partners are taxedon their allocable share of income whether it is distributed ornot.
	D. Partners areconsidered employees of the partnership.

5) Which of the followingstatements is incorrect?

	A. The number of Scorporation shareholders is unlimited.
	B. S corporationsmust allocate income and expenses to their shareholders based ontheir proportionate ownership interest.
	C. S corporationincome is taxed to shareholders when earned.
	D. S corporationlosses can offset shareholder income from other sources.

6) Which of the followingstatements is incorrect?

	A. Limited partners'liability for partnership debt is limited to their amount ofinvestment.
	B. In a generalpartnership, all partners have unlimited liability for partnershipdebts.
	C. In a limitedpartnership, all partners participate in managerialdecision-making.
	D. All of thestatements are correct.

7) Three members form an LLC inthe current year. Which of the following statements is incorrect?

	A. The LLC can electto have its default classification ignored.
	B. The LLC's defaultclassification under the check-the-box rules is as apartnership.
	C. The LLC can electto be taxed as a C corporation with no special taxconsequences.
	D. If the LLC electsto use its default classification, it can elect to change itsstatus to being taxed as a C corporation beginning with the thirdtax year after the initial classification.

8) Identify which of thefollowing statements is false.

	A. Under thecheck-the-box regulations, an LLC that has only two members(owners) must be taxed as a partnership.
	B. The check-the-boxregulations permit an LLC to be taxed as a C corporation.
	C. A business neednot be incorporated under state or federal law to be taxed as acorporation.
	D. Once an electionis made to change its classification, an entity cannot change againfor 60 months.

9) Identify which of thefollowing statements is true.

	A. The check-the-boxregulations permit an LLC to be taxed as a C corporation.
	B. Under thecheck-the-box regulations, an LLC that has only two members(owners) default classification is as a partnership.
	C. Once an electionis made to change its classification, an entity cannot change againfor 60 months.
	D. All of thestatements are true.

10) For Sec. 351 purposes theterm property does not include

	A. accountsreceivable
	B. cash
	C. inventory
	D. servicesrendered

11) Identify which of thefollowing statements is true.

	A. The exchange ofstock for services rendered is not a taxable transaction.
	B. The repeal of Sec.351 would result in more existing businesses beingincorporated.
	C. Section 351 wasenacted to allow taxpayers to incorporate without incurring adversetax consequences.
	D. All arefalse.

12) Barry, Dan, and Edithtogether form a new corporation; Barry and Dan each contributeproperty in exchange for stock. Within 2 weeks after the formation,the corporation issues additional stock to Edith in exchange forproperty. Barry and Dan each hold 10,000 shares and Edith willreceive 9,000 shares. Which transactions will qualify fornonrecognition?

	A. Only the secondtransaction will qualify for nonrecognition.
	B. Only the firsttransaction will qualify for nonrecognition.
	C. Because of thestep transaction doctrine neither transaction will qualify.
	D. Both transactionswill qualify under Sec. 351 if they are part of the same plan ofincorporation.

peararmadillo631

NEED 10 PAPER

You are the manager of Acme Fireworks. The company started in the ownerï¿½s garage two years ago and now has 15 employees that you manage. The company started as a sole proprietor, and the owner has never changed the entity. The company makes and sells fireworks. The owner has informed you that the company has received inquiries from several large retailers about the companyï¿½s ability to fill large orders on a regular basis. The owner told the retailers that the company could fill such orders, and a price per unit was agreed upon. No other details were discussed. The owner is anticipating that new employees will need to be hired but is worried that if the large orders do not continue, the company will not have the funds to pay the new employees. The owner is now considering changing the business entity but does not know what entity to form or how to form it.

The owner has asked you to do the following:

Explain potential personal liability for injuries to consumers caused by the product.
Analyze whether the owner formed a contract with the retailers applying the five elements as discussed from Week Two to the hypothetical facts.
Analyze how different employment types could be used with application of hypothetical facts.
Recommend a new business entity. Provide a rationale to support your recommendation

For each task, be sure to analyze the relevant law, apply the facts to the law, and make a conclusion. OUTLINE BELOW

Introduction

Provide a brief overview of the content contained within the proposal.
Thesis: Transition from the current sole proprietorship to a Limited Liability Company (LLC) is the most seamless and logical progression based on the projected business model.

Assessed Product Risk and Personal Liability

Discuss the inherent risks associated with firework manufacturing and shipping.
Note the variations/correlations in personal and business liabilities due to perceived negligence resulting in consumer/employee injury.
Potential liabilities resulting from defective merchandise.
Contract Viability
Review the five elements of a contract from the information provided.
1. Offer
2. Acceptance
3. Consideration
4. Legality
5. Capacity
Provide recommendation of contract viability/probability

Recruiting and Compensation

Employment Types
1. Full-time
2. Part-time
3. Casual
4. Daily/weekly hire
5. Probationary
Determine the best option to increase productivity while minimizing prolonged or unexpected expenses
Business Entity
Discuss the different business entities available
1. Sole Proprietor
2. Partnership
3. Corporation
4. Limited Liability Company
Compare and contrast benefits of an LLC v. other archetypes
Conclusion
Review all previously discussed information and develop a coherent vision
Discuss aforementioned vision as it relates to thesis statement
CHAPTER 5: Understanding and Choosing a Legal Structure. (2012). Women's Small Business Start-Up Kit (9781413317220), 149-186.
Pakroo, P. H. (2014). CHAPTER 1: Choosing a Legal Structure. Small Business Start-Up Kit, 7-28.

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LEGL 225 Lecture Notes - Lecture 8: Girls, Inc.

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