Business and personal assets might be required to pay Unlimited All business

Business and personal assets might be required to pay

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Business and personal assets might be required to pay Unlimited All business’ partners are responsible for all liability incurred by the business. All partner’s business and personal assets are subject to a Limited The general business partner has unlimited liability while LP have limited liability General business partner’s personal assets can Limited Shareholders have limited liability. LLC is treated as its own entity separate from any shareholders’ personal assets. In case of a lawsuit, only the LLC assets and shareholders’ Limited Both corporations S and C offer limited liability to its shareholders. The owners of a corporation (stockholders) are not personally liable for the corporations’ debts, lawsuits, and violations beyond their
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6 outstanding debts, lawsuits, and violations. lawsuit. reach in case of a lawsuit while LP personal assets are cannot since they have limited liability. investment capital can be jeopardized in case of a lawsuit against the business. investment in the company Above is a chart comparing the different types of liability exposure Mr. Tinker and his business could be subjective to depending on his business organizational entity if a breach of contract lawsuit is filed against him. Each business organizational entity provides different advantages and disadvantages to a company's liability, formation requirements, and taxation structure. It is up to the business owner or owners to carefully compare and contrast their options to find the right fit for their business. If I am looking to start an in-home care business, I would recommend forming a corporation S. Corp S entity would best fit the business by offering limited liability to the owner and shareholders, meaning in case of any lawsuit against the company my assets beyond my investment to the company would be protected. Corporation S could qualify for small business tax exemptions. It would not require corporations' formalities beyond an annual shareholders meeting. It can be transferred to eligible S corporation shareholders and generally only requires Form 1120S and K-1 for shareholders' tax purposes (Hopson,2014). Understanding what the different type of organizational entities has to offer to any business is very important to choose the right liability exposure, management, taxation and ease of formation that best fit the market' and owners' needs and demands.
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7 References Crelin, J. (2020). Sole proprietorship. Salem Press Encyclopedia . Hopson, J. F. (2014). Making the right choice of business entity: Protecting assets while weighing tax and estate planning issues. The CPA Journal, 10 . Rohland, L. (2020). Limited liability (corporate law). Salem Press Encyclopedia . Seaquist, G. (2012). Business law for managers [Electronic version].
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  • Winter '19
  • Stacey Callway
  • Corporation, partner, business owner, Mr. Tinker, LEGAL UNDERPINNING OF BUSINESS LAW

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