Explain the main advantages of the following: (a) Proprietorship. (b) Partnership . (c) Limited Liability Company.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 12, Problem 1DQ

To determine

Explain the main advantages of the following:

(a) Proprietorship.

(b) Partnership.

(c) Limited Liability Company.

Expert Solution & Answer

Explanation of Solution

Proprietorships: Proprietorship is a form of organization, which is owned by an individual, called proprietor. The most common proprietors are lawyers, physician, and more.

Partnership: It is that form of organization which is owned and managed by two or more persons who invest and share the profits and losses according to a pre-determined ratio.

Limited Liability Company: It is that form of organization which is formed as a legal entity that provides limited liability to the owners. It has a common seal.

The main advantages of Proprietorships are:

Easy of formation: It is easy for forming this type of entity.
Non-taxable entity: This entity is not taxed for federal income tax purposes.

The main advantages of Partnership are:

Moderately complex to form: It is formed with a partnership agreement, so moderately complex.
Non-taxable entity: This entity is not taxed for federal income tax purposes.

The main advantages of Limited Liability Company are:

Moderately complex to form: It is formed with an agreement among the owners, so moderately complex.
Non-taxable entity: This entity is not taxed for federal income tax purposes, but the owners are required to file the individual members’ tax return.
Expanded access to Capital: This entity is attracted by the investors to invest in the organization because of the limited liability.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 2

Question

Chapter 12, Problem 1DQ

To determine

Explain the main advantages of the following:

(a) Proprietorship.

(b) Partnership.

(c) Limited Liability Company.

Expert Solution & Answer

Explanation of Solution

Proprietorships: Proprietorship is a form of organization, which is owned by an individual, called proprietor. The most common proprietors are lawyers, physician, and more.

Partnership: It is that form of organization which is owned and managed by two or more persons who invest and share the profits and losses according to a pre-determined ratio.

Limited Liability Company: It is that form of organization which is formed as a legal entity that provides limited liability to the owners. It has a common seal.

The main advantages of Proprietorships are:

Easy of formation: It is easy for forming this type of entity.
Non-taxable entity: This entity is not taxed for federal income tax purposes.

The main advantages of Partnership are:

Moderately complex to form: It is formed with a partnership agreement, so moderately complex.
Non-taxable entity: This entity is not taxed for federal income tax purposes.

The main advantages of Limited Liability Company are:

Moderately complex to form: It is formed with an agreement among the owners, so moderately complex.
Non-taxable entity: This entity is not taxed for federal income tax purposes, but the owners are required to file the individual members’ tax return.
Expanded access to Capital: This entity is attracted by the investors to invest in the organization because of the limited liability.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 12, Problem 1DQ

To determine

Explain the main advantages of the following:

(a) Proprietorship.

(b) Partnership.

(c) Limited Liability Company.

Expert Solution & Answer

Explanation of Solution

Proprietorships: Proprietorship is a form of organization, which is owned by an individual, called proprietor. The most common proprietors are lawyers, physician, and more.

Partnership: It is that form of organization which is owned and managed by two or more persons who invest and share the profits and losses according to a pre-determined ratio.

Limited Liability Company: It is that form of organization which is formed as a legal entity that provides limited liability to the owners. It has a common seal.

The main advantages of Proprietorships are:

Easy of formation: It is easy for forming this type of entity.
Non-taxable entity: This entity is not taxed for federal income tax purposes.

The main advantages of Partnership are:

Moderately complex to form: It is formed with a partnership agreement, so moderately complex.
Non-taxable entity: This entity is not taxed for federal income tax purposes.

The main advantages of Limited Liability Company are:

Moderately complex to form: It is formed with an agreement among the owners, so moderately complex.
Non-taxable entity: This entity is not taxed for federal income tax purposes, but the owners are required to file the individual members’ tax return.
Expanded access to Capital: This entity is attracted by the investors to invest in the organization because of the limited liability.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 12, Problem 1DQ

To determine

Explain the main advantages of the following:

(a) Proprietorship.

(b) Partnership.

(c) Limited Liability Company.

Expert Solution & Answer

Explanation of Solution

Proprietorships: Proprietorship is a form of organization, which is owned by an individual, called proprietor. The most common proprietors are lawyers, physician, and more.

Partnership: It is that form of organization which is owned and managed by two or more persons who invest and share the profits and losses according to a pre-determined ratio.

Limited Liability Company: It is that form of organization which is formed as a legal entity that provides limited liability to the owners. It has a common seal.

The main advantages of Proprietorships are:

Easy of formation: It is easy for forming this type of entity.
Non-taxable entity: This entity is not taxed for federal income tax purposes.

The main advantages of Partnership are:

Moderately complex to form: It is formed with a partnership agreement, so moderately complex.
Non-taxable entity: This entity is not taxed for federal income tax purposes.

The main advantages of Limited Liability Company are:

Moderately complex to form: It is formed with an agreement among the owners, so moderately complex.
Non-taxable entity: This entity is not taxed for federal income tax purposes, but the owners are required to file the individual members’ tax return.
Expanded access to Capital: This entity is attracted by the investors to invest in the organization because of the limited liability.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 12, Problem 1DQ

To determine

Explain the main advantages of the following:

(a) Proprietorship.

(b) Partnership.

(c) Limited Liability Company.

Expert Solution & Answer

Explanation of Solution

Proprietorships: Proprietorship is a form of organization, which is owned by an individual, called proprietor. The most common proprietors are lawyers, physician, and more.

Partnership: It is that form of organization which is owned and managed by two or more persons who invest and share the profits and losses according to a pre-determined ratio.

Limited Liability Company: It is that form of organization which is formed as a legal entity that provides limited liability to the owners. It has a common seal.

The main advantages of Proprietorships are:

Easy of formation: It is easy for forming this type of entity.
Non-taxable entity: This entity is not taxed for federal income tax purposes.

The main advantages of Partnership are:

Moderately complex to form: It is formed with a partnership agreement, so moderately complex.
Non-taxable entity: This entity is not taxed for federal income tax purposes.

The main advantages of Limited Liability Company are:

Moderately complex to form: It is formed with an agreement among the owners, so moderately complex.
Non-taxable entity: This entity is not taxed for federal income tax purposes, but the owners are required to file the individual members’ tax return.
Expanded access to Capital: This entity is attracted by the investors to invest in the organization because of the limited liability.

Answer 6

Chapter 12, Problem 1DQ

To determine

Explain the main advantages of the following:

(a) Proprietorship.

(b) Partnership.

(c) Limited Liability Company.

Expert Solution & Answer

Explanation of Solution

Proprietorships: Proprietorship is a form of organization, which is owned by an individual, called proprietor. The most common proprietors are lawyers, physician, and more.

Partnership: It is that form of organization which is owned and managed by two or more persons who invest and share the profits and losses according to a pre-determined ratio.

Limited Liability Company: It is that form of organization which is formed as a legal entity that provides limited liability to the owners. It has a common seal.

The main advantages of Proprietorships are:

Easy of formation: It is easy for forming this type of entity.
Non-taxable entity: This entity is not taxed for federal income tax purposes.

The main advantages of Partnership are:

Moderately complex to form: It is formed with a partnership agreement, so moderately complex.
Non-taxable entity: This entity is not taxed for federal income tax purposes.

The main advantages of Limited Liability Company are:

Moderately complex to form: It is formed with an agreement among the owners, so moderately complex.
Non-taxable entity: This entity is not taxed for federal income tax purposes, but the owners are required to file the individual members’ tax return.
Expanded access to Capital: This entity is attracted by the investors to invest in the organization because of the limited liability.

Answer 7

Chapter 12, Problem 1DQ

To determine

Explain the main advantages of the following:

(a) Proprietorship.

(b) Partnership.

(c) Limited Liability Company.

Answer 8

Expert Solution & Answer

Explanation of Solution

Proprietorships: Proprietorship is a form of organization, which is owned by an individual, called proprietor. The most common proprietors are lawyers, physician, and more.

Partnership: It is that form of organization which is owned and managed by two or more persons who invest and share the profits and losses according to a pre-determined ratio.

Limited Liability Company: It is that form of organization which is formed as a legal entity that provides limited liability to the owners. It has a common seal.

The main advantages of Proprietorships are:

Easy of formation: It is easy for forming this type of entity.
Non-taxable entity: This entity is not taxed for federal income tax purposes.

The main advantages of Partnership are:

Moderately complex to form: It is formed with a partnership agreement, so moderately complex.
Non-taxable entity: This entity is not taxed for federal income tax purposes.

The main advantages of Limited Liability Company are:

Moderately complex to form: It is formed with an agreement among the owners, so moderately complex.
Non-taxable entity: This entity is not taxed for federal income tax purposes, but the owners are required to file the individual members’ tax return.
Expanded access to Capital: This entity is attracted by the investors to invest in the organization because of the limited liability.