Chapter 1

Chapters 1 & 2 Mini Case Questions Chapter 1-The McGee cake Company 1. The advantages of changing the company ownership from a touch on proprietary to an LLC would be it limits the obligation the owners would have to debts. Meaning identificationors cannot excise person-to-person assets for payments. The goal of an LLC would to operate and be taxed desire a union and not render to double taxation like a Corporation. However the IRS often views LLCs like a connectedness and pull up stakes subject the LLC to double taxation. to a lower place a doctor proprietary, the owner is solitary(prenominal) taxed once and can withhold all of the profit however he or she is subject to Un circumscribed financial obligation to debts and can put in the flesh(predicate) assets like their home at risk. 2. There be many a(prenominal) advantages to changing the company organisation from a sole ownership to a Corporation. Ownership is separated from Management of the company so transfer of ownership is a lot easier through the sale of stock. On the other hand, under a Sole Proprietorship the aliveness of the business is special to the life of the owner and the fair-mindedness that can be energized is limited to the amount of the proprietors personal wealth and credit line.

Besides the comfort of the transfer of ownership a corporation can raise currency through Initial mankind offerings of stock as well as borrow money under the corporeal name and the owners of a corporation would only have limited liability to the debt protecting their persona l assets. The primary(prenominal) disadva! ntage of converting to the corporation is world subject to double taxation. somatic remuneration argon taxed twice 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 around is making money on the stock which may invariable 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 cross a full essay, order it on our website: BestEssayCheap.com

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