Chapter 1

Chapters 1 & 2 Mini Case Questions Chapter 1-The McGee cake Company 1. The advantages of changing the company ownership from a bushel proprietorship to an LLC would be it limits the obligation the owners would have to debts. Meaning identificationors cannot strike person-to-person assets for payments. The goal of an LLC would to operate and be taxed like a union and not showcase to double taxation like a Corporation. However the IRS often views LLCs like a connection and pull up stakes subject the LLC to double taxation. at a lower place a doctor proprietorship, the owner is solitary(prenominal) taxed once and can commemorate all of the profit however he or she is subject to Un circumscribed financial obligation to debts and can put personalized assets like their home at risk. 2. There be umteen advantages to changing the company organisation from a sole proprietorship to a Corporation. Ownership is separated from Manageme nt of the company so transfer of ownership is a lot easier through the sales agreement of stock. On the other hand, under a Sole Proprietorship the aliveness of the business is confine to the life of the owner and the candor that can be urge ond is limited to the amount of the proprietors personal wealth and credit line.

Besides the simplicity of the transfer of ownership a corporation can raise currency through Initial mankind offerings of stock as well as borrow money under the corporeal name and the owners of a corporation would only have limited liability to the debt protecting their personal assets. The primary(prenomin al) disadvantage of converting to the corpor! ation is macrocosm subject to double taxation. somatic kale atomic number 18 taxed doubly once when the profits are earned and once when profits are paid erupt such as dividends. other disadvantage to corporations is having to answer to the conduct holders which all they care close is making money on the stock which may conformable with the goals of the company. Under a Sole Proprietorship profits are only taxed once just now the owner of a Sole Proprietorship has unlimited liability and could...If you want to ride a full essay, order it on our website: BestEssayCheap.com

If you want to get a full essay, visit our page: cheap essay