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PT Admin > Lecture 6: Business Structure > Flashcards

Lecture 6: Business Structure Flashcards

1
Q

A business structure operating configuration includes there 6 things:

A 
Legal structure
Ownership
Vision
Mission
Assumption about the behavior of the employees
Business performance
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2
Q

Deciding your structure:

Make sure your consultants know these 2 things

A

Health care

State law and accounting

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3
Q

Deciding your structure:

You should consult with these 4 people

A

Lawyer
Accountant
Financial advisor
Tax advisor

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4
Q

Legal structure:

\_\_\_\_\_\_ proprietorship
\_\_\_\_\_\_ partnership
\_\_\_\_\_\_ partnership
\_\_\_\_\_\_\_\_\_ (\_\_ or \_\_\_)
\_\_\_\_\_\_\_ corporation
\_\_\_\_\_\_ \_\_\_\_\_\_ company
A 
Sole
General
Limited
Corporation (C or S)
Personal
Limited Liability
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5
Q

Government does not like _____ _______

A

Independent contractors — tax advantages

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6
Q

Cannot be _______ contractor unless you fit certain criteria

A

Independent

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7
Q

What is the difference between a contractor and employee

A

A contractor will see a few home care patients for different organizations

An employee will treat home care patients for the same organization

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8
Q

Cannot be an independent contractor unless you have ________

A

Expertise

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9
Q

If you have a SET schedule that you were given, you are not a _____ _____

A

Independent contractor

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10
Q

Sole Proprietorship:

Any ___________ _____ will by default become a sole proprietorship if you do not _______ _________

A

Unincorporated business

Deliberately choose

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11
Q

Sole Proprietorship: This is a _______ position

You will be a sole proprietor if you make no other _______ to organize in any other way

A

Default

Attempt

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12
Q

Sole proprietorship is _____, no one else

A

SOLO

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13
Q

Sole Proprietorship:

You have a _____ ____ ____ instead of SSN

A

EIN Tax ID

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14
Q

Sole proprietorship characteristics:

_____ and _______ to form

A

Easy and inexpensive

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15
Q

Sole proprietorship characteristics:

Owner has ______ _____, takes all of _______

A

Full control

Profit

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16
Q

Sole proprietorship characteristics:

Tax: Business profit is the owner’s _______ ______

A

Personal income

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17
Q

Sole proprietorship characteristics:

You have unlimited ______ ________

A

Personal liability

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18
Q

Partnership:

More than _____ ______

A

One owner

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19
Q

Partnership:

______ to form

A

Inexpensive

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20
Q

Partnership:

Business profit treated as _____ _____

A

Personal income

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21
Q

Partnership: Profit is divided ______ ____ ______

A

Between the partners

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22
Q

Partnership: Pay taxes at own ____ ____, even if the tax rates are different

A

Tax rate

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23
Q

Partnership: Unlimited _____

A

Liability

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24
Q

Partnership:

If partner messes up, you are not liable for their actions (true or false)

A

False, you are liable!

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25
Q

Limited partnership:

______ partners have a financial interest in the business

They are not permitted to be involved in the ____ ____ ____ operation of the business

A

Silent

Day to day

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26
Q

Is a partnership agreement required by law?

A

No

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27
Q

Partnership agreement:

Very important to clearly define the ____ of the parters

A

ROLE

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28
Q

Partnership agreement: Clearly spells out what will happen if one partner _______ the Practice

A

Leaves

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29
Q

Partnership agreement: Sets the framework fo discussion of _______ of the practice

A

Aspects

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30
Q

Corporation:

A legal _______ of the business from its owners

A

Separation

31
Q

Corporation: The Corp has a ____ ____ _______ that control the corporation

A

Board of directors

32
Q

Corporation: The board appoints the _______ officers

A

Corporate

33
Q

C-Corporation:

Legal entity separate from owners formed under ____ _____

A

State law

34
Q

C-Corporation:

Is this expensive or inexpensive to form?

A

Expensive!!

Can be expensive to maintain

Corporate tax and tax on owners share (double tax)

35
Q

C-Corporation:

Limits ______ _______

A

Personal liability

36
Q

C-Corporation:

Easy to _______ ownership

A

Transfer

37
Q

C-Corporation: Easiest to raise _____ from ______ sources

A

Capital

Outside

38
Q

S-Corporation:

Advantages of _______ personal liability and _____ _____ tax treatment

A

Limited

Pass through

39
Q

S-Corporation:

Shareholders are limited to ___ and must be ____ _______ or ___ ______

A

35

US citizens

Resident aliens

40
Q

S-Corporation: What are the advantages?

A

Ease of transfer of business

Ease of raising capital

41
Q

S-Corporation:

What is the disadvantage?

A

High regulation and legal restrictions

42
Q

Personal Service Corporation:

For individuals who are the _______ and the _______ of the service

Must be the _____ _______

A

Owners and providers

Same profession

43
Q

Personal Service Corporation:

States use the designation of PC for _______ ______ or SC for _______ _______

A

Personal corporation

Service corporation

44
Q

Personal Service Corporation: All profits can be put back into the business leaving no _______ _____ to pay

A

Corporate tax

45
Q

Personal Service Corporation:

_____ _________ etc. can be deducted

A

Health insruance

46
Q

Personal Service Corporation:

Is it costly to form?

A

NO

47
Q

Personal Service Corporation: Is there personal liability protection?

A

NO

48
Q

Which legal structure is most popular?

A

The limited liability company

49
Q

The Limited Liability Company:

The LLC has been around since _____

A

1988

50
Q

The Limited Liability Company:

Taxed like a ________
Tax pass though, no ________ tax

A

Partnership

Corporate

51
Q

The Limited Liability Company:

It is ________ business form regulated in every state

A

Unincorporated

52
Q

The Limited Liability Company:

Legally it is ______ from its owners

A

Separate

53
Q

The Limited Liability Company:

They are regulated differently in each ______

A

State

54
Q

The Limited Liability Company:

LLC is technically not legal for ____, but ____ not excluded from literature necessarily

A

PTs

PTs

55
Q

Tax status: list the two

A

For profit or not for profit

56
Q

Tax status has to do with what you do with _____ once you have it

A

Money

57
Q

Not for profit means that you need to be ______ with a certain ______ and _______

A

Organized

Vision and mission

58
Q

How is tax status determined?

What is something that is NOT easy?

A

Qualifying for tax exempt status

59
Q

How is tax status determined?

The __________ of the business
Does money provide the _____ to pay for care?
Is money the ____ itself?

A

PURPOSE

Means
Means

60
Q

How is tax status determined?

How are the ______ used?

Money used to provide ____ for those that cannot pay
OR
Money _______ among the owners?

A

Profits

Care

Divided

61
Q

For profit business:

Provides a _______ or _______ to make money for its _______

A

Service

Goods

Owners

62
Q

For profit business:

Can be ______ or ________

Taxes are paid on the ______

A

Private or public

Profits

63
Q

For profit business:

Remaining ______ can be distributed to the owners

A

Profits

64
Q

For profit business:

Examples?

A

Private practices

Corporations

65
Q

Not for profit business:

Tax _______ federal, state and local taxes

Must apply to the ____ for this status

A

Exempt

IRS

66
Q

Not for profit business:

The business must be involved in some type of ______ ______

A

Community service

67
Q

Not for profit business: Cannot provided financial benefit to any _____ _______ or _____ _______

A

Private individual

FP business

68
Q

Not for profit business:

Non profits are a _______ on the community

Why?

A

BURDEN

Lost tax revenue

Community expenses: fire, police

69
Q

What are the three types of ownership?

A

Public
Private
Government

70
Q

Ownership:

Public?

A

stock is available for purchase

71
Q

Ownership:

Private?

A

Owned by individuals, or privately held group

72
Q

Ownership:

Government?

A

Owned by the federal, state or local government

Usually not for profit and tax exempt

73
Q

The correct business structure:

Best structure must be determined based on the _______ ________

This will determine the legal structure, _____ _____ and _____ _____ of the business

A

Business objectives

Tax status, operating structure

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