Entities Overview Flashcards
A buisness entity may be classified as a
- ___________
- _______ _________ _______
- _______ ___________
- _______ ___________
- ____ ______________
- corporation
- limited liability company
- general partnership
- limited partnership
- sole proprietorship
Business owner legally for corporations by filing ________ __ _____________
articles of incorporation
Which entity types of businesses are considered legal entities separate from their owners?
corporations
LLC’s
general partnerships
Limited liability companies are created by filing either ___________ __ ____________ or ________ __ ____________
certificate of organization
articles of organization
A written agreement among partners to form a general partnership is called a ___________ _________
partnership agreement
True or False:
A general partnership my be formed informally without a written agreement.
True
Limited partnerships are usually organized by written agreement and typically must file a ___________ __ _______ ___________
certificate of limited partnership
For a corporation, who is responsible for paying the liabilities? (corporation or owners)
LLC’s?
partnerships?
sole proprietorship?
the corporation
LLC’s
general partners
owner
True or False:
Limited partners are responsible to pay liabilities for the partnership.
False
Individual business owners may organize their businesses as ______-______ ____ and receive the liability protection afforded LLC members.
single-member LLCs
State whether the entity type is flexible or nonflexible: corporations LLC general partnership limited partnership sole proprietor
c - not flexible llc - flexible gp - flexible lp - flexible sp - n/a
What entity type is suitable for initial public offering (IPO)?
corporation
True or False:
A business’s legal form my be different from its tax form.
True
For tax purposes, business entities can be classified as either ________ _________ _______ or ____-_______ ________
separate taxpaying entities
flow-through entities
(Separate taxpaying or Flow-through) entities pay tax on their own income.
Separate taxpaying
(Separate taxpaying or Flow-through) entities don’t pay taxes because income flows to the business owners.
Flow-through
Entities that are legal corporations under state law are, by default, treated as __ ____________ for tax purposes; subject to tax provisions in Subchapter __ (and not Subchapter __) of the Internal Revenue Code
C corporations
C
S
C corporation report their taxable income to the IRS on Form ____
1120
Shareholders of legal corporations may qualify to make a special tax election known as an “__” election, thus permitting the corporation to be taxed as a ____-_______ entity called an __ ___________.
S
flow-through
S corporation
S corporations and their shareholders are subject to tax provisions in Subchapter __ of the Internal Revenue Code
S
S corporations report the results of their operations to the IRS on Form _____
1120S
Unincorporated entities are, by default, treated as ____-_______ entities; however, owners of an unincorporated entity can still elect to have their business taxed as a __ corporation instead.
flow-through
C
______________ ____-_______ entities are treated for tax purposes as either partnerships, sole proprietorships, or disregarded entities.
Unincorporated flow-through
What is a disregarded entity?
unincorporated entity with one owner that is considered to be the same entity as the owner
Unincorporated entities (including LLCs) with more than one owner are treated as ____________
partnerships
Income from businesses taxed as sole proprietorships is reported on ________ __ of Form ____
Schedule C
1040
Unincorporated entities with only one corporate owner, typically a single-member LLC, are ___________ for tax purposes; income and losses from this single, corporate-member LLC is reported as if it had originated from a division of the corporation and is reported directly on the single-member corporation’s return
disregarded
