SUBDOMAIN 310.1 - BUSINESS LAW
Competency 310.1.2: Organizational Forms - The graduate can select the appropriate form of organization for a business.
310.1.2-01: Differentiate between a sole proprietorship and general partnership.
310.1.2-02: Differentiate between a general partnership and a limited partnership.
310.1.2-03: Identify the distinguishing characteristics of C-corporations.
310.1.2-04: Identify the distinguishing characteristics of S-corporations.
310.1.2-05: Recognize the characteristics of a limited liability company (LLC).
310.1.2-06: Determine the appropriate business form for a given situation.
To complete this task you will need to complete an attached Business Form and write a memorandum. The purpose of the Business Form is for you to demonstrate your knowledge of the various forms of business organizations as well as their advantages and disadvantages. Please pay particular attention to the five key characteristics listed below while you are writing this report.
The five key characteristics are as follows:
• Liability: What are the limits on liability and protection of not only business assets, but personal assets?
• Income taxes: What are the requirements for each form of business and/or owner with regard to paying federal, state, and local income taxes? Who is responsible for filing a tax return, the business, the owners, or both?
• Continuity of the organization: What would the consequences be if an owner were to die, retire, or withdraw from the business?
• Control: Who has ultimate control over important decisions as well as day to day operations?
• Profit retention: How are the profits distributed between the company and the owners/shareholders?
A manufacturing business produces a variety of wood moldings, hardwood doors, high-end kitchen cabinets, and specialty cabinets and bookcases for dens, home libraries, offices, etc. The business owner has been...