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homework # 8 - of employee motivation 4 a S-corporation...

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Yi Liu ENGRI 127 Homework # 8 Section 4 1. Because creating a sole proprietorship is easy and inexpensive, the owner maintains complete control of the business and retains all the profits. Business losses can be deducted against the sole proprietor’s other sources of income. It is not subject to double taxation. The business is easy to dissolve. 2. a. the business can not be a subsidiary of another corporation. b. the shareholders must be US citizens. c. it can only have one class of stock issued and outstanding. d. it can have no more than 100 members. e. all shareholders must agree to have the corporation formed as a subchapter S corporation. 3. Because the mechanics of raising capital is easier for a startup firm; Stock is liquid if traded on a major stock exchange; owners are liable only for the debts and obligations of the corporation up to the amount of their investment; no restrictions exist on the number of shareholders; the ability to share stock with employees through stock option or other incentive plans can be a powerful form
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Unformatted text preview: of employee motivation. 4. a. S-corporation: Reflective Images Inc. 912 Baca St Santa Fe, NM 87505-0931 United States b. LLC: Graphic Controls LLC 400 Exchange St. Buffalo, NY 14204-2064 United States c. LLP: Thompson & Knight LLP 1700 Pacific Ave. Ste. 3300 Dallas, TX 75201 United States d.C-corporation: Jelly Belly Candy Co. 1 Jelly Belly Ln. Fairfield, CA 94533-6741 United States 5. Even through HLM is a corporation, Fran can not just close down it and focus on her other companies without dealing with the amount of money her company owed to creditors. For corporation, owners are liable only for the debts and obligations of the corporation up to the amount of their investment. Also a Corporation is a separate legal entity organized under the authority of a state. The corporation is separate from its owners ( shareholders).In addition, A corporation is governed by a board of directors, which is elected by the shareholders....
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