Business Law
What is a business law?
The type of law that dictates how to form and run a business (start, buy, manage, and close or sell any type of business).
When the partnership can be used?
when there is more than one owner of the business.
True or False
S Corporation allows a C-Corp to elect to be taxed as a partnership.
TRUE
TRUE OR FALSE.
IRS uses the term "C-Corp" to distinguish a non-profit Corporation form one that has elected to be taxed as an S Corporation.
False.
True or False:
There is legal separation between the business owner and the business.
FALSE.
What are the four main types of entities in business law?
-corporations
-parterships
-limites liability companies
-sole propiertorship
What are the 3 responsibilities that the general partnership share?
Legal responsibilities
financial responsibilities
management responsibilities
True or False:
The S corporation avoids the double taxation that corporations normally face
True.
What is a Corporation?
Legal entity separate from its owners.
True or False:
Usually the owner, is an individual, but it could be a married couple.
True.
What is breach of contract?
when one party doesn´t hold up his of her end of the bargain.
What should the partners have with the help of their attorney?
They should have the detailed partnership agreement to spell out the division of ownership and duties.
One potential tax advantage in S Corporation is:
Instead of all their business income being subject to self-employment tax, only owners salaries are.
Which form is the one that a corporation must file?
Its own income tax return.
one drawback to operating a business as a sole propietor:
is that usually the owner is personally liable legally and financially for the business.
What is the role of the equal employment opportunity Commission?
To interpret and enforce federal laws prohibiting discrimination.
What types of partnership exist ?
Limited liability partnerships
Professional Partnerships
Limited partnerships
When might operating as an S corporation be preferable?
when a corporation wants to avoid double taxation on dividend income.
when an LLC memebers want to minimize their self-employment tax burden.
when a company doesnt have a need for issuing more than one class of stock or having more than 100 shareholders.
For what is used the term "Double Taxion"?
Is often used to describe how the profit of a corporation is taxed, and then profits distributed as dividends.
When might operating as a Sole Proprietorship be preferable?
When its a home-based business
when a business has only one owner
when a business has no employees
products and services that have minimal legal risks associated with them.
Complete:
Bussines law includes ________ and ____ law as well as ______ regulations.
-State
-Federal
-Administrative
When is preferable operate as a partnership?
When owner don´t intent to invest money back into the business
When a multi-owner business doesn´t want to deal with compliance formalities
when a multi-owner business has no employees
when a business provides products and services that have minimal legal risks associated with them.
wich restrictions apply in a S corporation?
It may only issue one class of stock, it may only have up to 100 stockholders, and it cannot have shareholders who are nonresident aliens.
When might operating as a C corporation be preferable?
when a company´s profits are expected soon and will be reinvested
when a company wants to seek venture capital and equity financing
when a company wants to have a large number of shareholders.
A potential downside of the sole proprietorship:
Business income is subject to self-employment taxes.