equine management quiz 1

which legal business organization fits your needs:

depends on:

• liability

• control

• number of owners

• tax purposes

major types of business ownerships

1. sole proprietorship

2. general partnerships

3. corporations

4. limited liability company

things to consider:

• tax aspect of each business

• limitations on liability

• willingness to maintain requirements of that business type

sole proprietorship

• most common

• simplest

• most flexible

• owner is solely responsible for all profits/losses

• no legal filing required

• profits reported as schedule C or F as self employment

advantages of sole proprietorship

• one owner

• simplicity

disadvantages of sole proprietorship

• unlimited personal liability w/ no protection

• self-employment tax paid on net income

• contributes personal funds

• lots of insurance

taxes needed for sole proprietorship:

• income tax

• self employment tax

• estimated tax

• social security & medicare tax

• income tax withholdings

• federal unemployment tax