BLAW 2301 Chapter Notes - Chapter 31: Fiduciary
Document Summary
Sole proprietorship unincorporated business owned by a one person. Advantages: ease of formation easy and inexpensive to create and operate, taxes flow-through tax entity. Organization that does not pay income tax on profits but flows through owners who pay tax on their own individual profit rates. Disadvantages: liability sole proprietor is personally liable for all debts, limited capital get a loan from someone or get money from part ownership. Advantages: limited liability shareholders do not have personal liability but do for their own negligence, transferability of interests stocks can be bought and sold easily, duration perpetual existence, can continue without their partners. Disadvantages: logistics require substantial expense and effort to create and operate, taxes is a taxable entity, pay taxes and file returns on its own. Have the limited liability of a corporation and tax status of a flow-through entity. No more than 100 shareholders: must be individuals, estates; not partnerships or corporations.
