Organizational Ownership

Question 0

A business owned by a single individual (husband or wife for tax purposes) in severalty
•owner is personally responsible for any business debt; personal assets could be attached in the event of default(except for property that is owned with the spouse as tenants by the entirety)
•can operate under the sole proprietor’s name or under an assumed or fictitious name, if registered with the state, for example Joe Smith d.b.a (Doing business as) Smith Realty or Patsy Davis ( a.k.a.)Patsy cakes.

Answer 0

Sole proprietorship

Question 1

A ____ is a legal entity that is created and operated according to the laws of each state. The ____ could be public, cities, counties, school districts, etc. private for profit, or private nonprofit. It is regarded by the law as a legal person separate from the individual stockholders, and therefore shareholders are not personally liable for the _____ debts. Within a _____ property is owned in severalty as the legal person. Tax implications for each type of _______ are:
•C _____: a C _______ must pay corporate income tax. When profits are distributed to the shareholders, the shareholders pay income tax as well, which leads to a situation of double taxation.
•S ______: an S ________ functions as a ______ would, like a partnership, it does not pay any ______ income taxes. Instead the ______ income or losses Are divided among and passed to its shareholders. The shareholders must then report the income or loss on their own individual income tax return. S _____ are not recognized in New York City, so S _______ must pay New York City corporate taxes.

Answer 1

Corporation

Question 2

In this arrangement each member has an equal right to manage the business and share in the profits as well as equal responsibility for the debts.

Answer 2

General partnership

Question 3

This business ownership structure offers its owner the advantage of limited liability (like corporations) and partnerships-like taxation, in which profits are passed through to the owners and taxed on the personal income tax returns.

Answer 3

Limited liability company (LLC)