Arcadia Sports
In this scenario we will evaluate the case of Jeb and Josh who opened a business called Arcadia Sports. Jeb is a wealthy partner owning multiple wind farms and doesn’t actively participate in the day to day operations of Arcadia Sports. Josh manages the business and provides subject matter expertise to the operation. On the first excursion of whitewater rafting, Jane (a customer), got hurt and suffered permanent damage to her spine. To top it all off, Jeb’s wind farms go bankrupt, leaving behind a line of debtors seeking to collect. Opening a new business can sometimes be nerve wracking. Regardless of if the end goal is a small business or a large corporation, knowing which type of business will be most profitable and beneficial is an essential
…show more content…
"a business organization in which you, as the sole proprietor, are in sole control of the management and the profits." (Kubasek 771). This is perhaps the most common type of business. Some of the advantages are: The sole proprietor has complete control of the business. It is very convenient since it doesn’t require too many formalities. The sole proprietor keeps all the profits of the business. No corporate tax payment. As everything in life, sole proprietorships has its disadvantages. Let’s touch on a few of them. A sole proprietor is personally liable for incidents, debts or obligations occurred in its business, even if they are caused by employees. Hard to find investors. Large start-up costs, because the money comes from personal accounts or loans. This is the preferred starting point for many business owners, this could be due to the tax break that it offers, and the free will to make decisions as pleased without having to consult with any partners. At my current financial status if I were to open a business it would probably be this entitie, since it requires no formalities and you keep all the profits, plus like I said, that tax break could really …show more content…
These shareholders elect a board of directors, which is responsible for managing the business. The board of directors, in turn, hires officers to run the day-to-day business. (Kubasek 774-775). You may recognize corporations like Walmart, Best Buy and Walgreens. Some advantages from owning or running a corporation are: Raising funds by selling shares. Shareholders are not held liable for the firm’s debts. If a shareholders pass away or leave the corporation remains in existence. Some corporations may be able to elect treatment as an S corporation, which exempts them from federal income tax other than tax on certain capital gains and passive income. (Business Formation, n.d.). Like the previously discussed entities, a corporation also has disadvantages. Formation requires more time, money and formalities. Corporate income is taxed twice. A corporation cannot deduct from its business income any dividends payed to its shareholders. (Business Formation, n.d.). A corporation! Who wouldn’t want to be a CEO or hold a high position in a business like this without any liabilities? The problem is, realistically, a lot of us don’t have the resources to get a corporation started, so unfortunately it remains as a
"a business organization in which you, as the sole proprietor, are in sole control of the management and the profits." (Kubasek 771). This is perhaps the most common type of business. Some of the advantages are: The sole proprietor has complete control of the business. It is very convenient since it doesn’t require too many formalities. The sole proprietor keeps all the profits of the business. No corporate tax payment. As everything in life, sole proprietorships has its disadvantages. Let’s touch on a few of them. A sole proprietor is personally liable for incidents, debts or obligations occurred in its business, even if they are caused by employees. Hard to find investors. Large start-up costs, because the money comes from personal accounts or loans. This is the preferred starting point for many business owners, this could be due to the tax break that it offers, and the free will to make decisions as pleased without having to consult with any partners. At my current financial status if I were to open a business it would probably be this entitie, since it requires no formalities and you keep all the profits, plus like I said, that tax break could really …show more content…
These shareholders elect a board of directors, which is responsible for managing the business. The board of directors, in turn, hires officers to run the day-to-day business. (Kubasek 774-775). You may recognize corporations like Walmart, Best Buy and Walgreens. Some advantages from owning or running a corporation are: Raising funds by selling shares. Shareholders are not held liable for the firm’s debts. If a shareholders pass away or leave the corporation remains in existence. Some corporations may be able to elect treatment as an S corporation, which exempts them from federal income tax other than tax on certain capital gains and passive income. (Business Formation, n.d.). Like the previously discussed entities, a corporation also has disadvantages. Formation requires more time, money and formalities. Corporate income is taxed twice. A corporation cannot deduct from its business income any dividends payed to its shareholders. (Business Formation, n.d.). A corporation! Who wouldn’t want to be a CEO or hold a high position in a business like this without any liabilities? The problem is, realistically, a lot of us don’t have the resources to get a corporation started, so unfortunately it remains as a