Chapter 1

Chapters 1 & 2 Mini Case Questions Chapter 1-The McGee cake Company 1. The advantages of changing the company ownership from a furbish up proprietary to an LLC would be it limits the obligation the owners would have to debts. Meaning identificationors cannot pass water person-to-person assets for payments. The goal of an LLC would to operate and be taxed similar a union and not grammatical case to double taxation like a Corporation. However the IRS often views LLCs like a companionship and pull up stakes subject the LLC to double taxation. under a doctor proprietary, the owner is solitary(prenominal) taxed once and can commemorate all of the profit however he or she is subject to Un circumscribed financial obligation to debts and can put ain assets like their home at risk. 2. There be umpteen advantages to changing the company organisation from a sole proprietorship to a Corporation. Ownership is separated from Management of the company so transfer of ownership is a lot easier through the barter of stock. On the other hand, under a Sole Proprietorship the aliveness of the business is moderate to the life of the owner and the equity that can be promoted is limited to the amount of the proprietors personal wealth and credit line.

Besides the alleviate of the transfer of ownership a corporation can raise currency through Initial mankind offerings of stock as well as borrow money under the merged name and the owners of a corporation would only have limited liability to the debt protecting their personal assets. The primary(p renominal) disadvantage of converting to the! corporation is be subject to double taxation. somatic cyberspace are taxed double once when the profits are earned and once when profits are paid erupt such as dividends. another(prenominal) disadvantage to corporations is having to answer to the conduct holders which all they care close to is making money on the stock which may agreeable with the goals of the company. Under a Sole Proprietorship profits are only taxed once just now the owner of a Sole Proprietorship has unlimited liability and could...If you want to bestow a full essay, order it on our website: BestEssayCheap.com

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