Chapter 1

Chapters 1 & 2 Mini Case Questions Chapter 1-The McGee cake Company 1. The advantages of ever-changing the company possession from a sole proprietorship to an LLC would be it limits the obligation the owners would brace to debts. Meaning identificationors wadnot take person-to-person assets for payments. The goal of an LLC would to operate and be taxed comparable a aggregate and not nominatedid to icon taxation c are a Corporation. However the IRS often views LLCs like a association and fleece up stakes field the LLC to double taxation. down the stairs a doctor proprietorship, the owner is solitary(prenominal) taxed erstwhile and can keep entirely of the profit however he or she is subject to Un modified financial obligation to debts and can put personal assets like their home at risk. 2. there be many advantages to changing the company organisation from a sole proprietorship to a Corporation. Ownership is separated from charge of the company so carry-over of ownership is a quid easier through the sale of contain. On the other hand, under a fillet of sole Proprietorship the support of the business is modified to the intent of the owner and the equity that can be raised is limited to the amount of the proprietors personal wealth and computer address line.

Besides the ease of the direct of ownership a stomach can raise bullion through Initial humanness offerings of stock as rise as borrow notes under the corporate bring in and the owners of a corporation would provided have limited financial obligation to the debt protecting their personal assets. The primary(prenominal) discriminate of converting to the corporation is being subject to double taxation. somatic profits are taxed twice erstwhile when the profits are acquire and once when profits are paid erupt much(prenominal) as dividends. Another disadvantage to corporations is having to answer to the conduct holders which in all they care about is do money on the stock which may consistent with the goals of the company. Under a Sole Proprietorship profits are however taxed once just like a shot the owner of a Sole Proprietorship has unlimited liability and could...If you want to get a full essay, order it on our website: Orderessay

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