Business Entitles, laws, and regulations
Adrian S, Williams
January 20, 2012
Business Entitles, laws, and Regulations
This paper will discuss the scenarios of business for each entity .We will discuss and identify the laws and regulations that each portion of a company should consider before starting a business .we will show the risk each business have to protect itself from as well the employment laws, and the regulations that will be constructed in these scenario’s.
Lou and Jose are planning to go into the bar business. They are going to open a sports bar and restaurant. In the planning stage they want to hang large flat screen TV’s throughout the bar for ...view middle of the document...
To establish the limited partnership a certificate of limited partnership must be filed with the office of the secretary of state. The partners must have agreed with written agreement showing, who are the general partners and who will be the limited partners. The agreement must outline the rights and responsibility of the partnership and show the rights and responsibilities.
The limited partner does not pay tax on the earnings of the partnership; however he has to pay taxes on the revenue received from the investment income of partnership. This would be included in his personal income.
The general partners are required to pay taxes on the earning of the partnership. In the business entity the major issue is liability, this puts the investors in a really bad position of losing their investment, Because of this it is important to make sure the general partners are skilled with running the new business entity. The limited partner must make sure that the general partners are qualified before signing any paper work .Also they must understand that their involvement are limited once the paper work is signed.
This scenario a wealthy investor named frank wants to open a franchise of extermination business throughout the United States. If frank wants to open locations across America the best thing for his new business entity is to start a corporation. By working as a corporation, frank Personal property would be protected from the company and working as a S corporation frank ant the other investors can avoid double taxation. This in turn will make it smarter to other investors wanting to start their own business.
To become a corporation, articles of incorporation must be filed with the secretary of state. The form 2553 must be filed with the IRS to elect the S static for a corporation. The S corporation allows the business to only be taxed based on the income of the business. The formation of the corporation gives Frank the talent to offer franchisees, which allows him to develop his business faster than first anticipated. It also gives Frank some security from the collapse of individual locations, and the costs associated with those locations.
In this business entity the major liability would be the loss of the initial investment made by Frank. However, if Frank had chosen to start this business as a sole proprietorship his liabilities...