A limited liability company is a hybrid type of legal structure that provides the limited liability features of a corporation and the tax efficiencies and operational flexibility of a partnership. Show The "owners" of an LLC are referred to as "members." Depending on the state, the members can consist of a single individual (one owner), two or more individuals, corporations or other LLCs. Unlike shareholders in a corporation, LLCs are not taxed as a separate business entity. Instead, all profits and losses are "passed through" the business to each member of the LLC. LLC members report profits and losses on their personal federal tax returns, just like the owners of a partnership would. • Taxed as a separate entity: Files its own income tax returns, and pays its own taxes. • Must follow formal statutory procedures: Must have a Board of Directors, which controls major management decisions, unless waived, and Officers, adopt Bylaws to govern the day to day affairs of the business, hold at least annual meetings of Shareholders and Directors, etc. • Corporations listed on a stock exchange are referred to as "Publically Held (Traded)", which are heavily regulated under federal and state laws. Possess two other characteristics, in addition to characteristic that apply to all corporations: Centralized Management (managed by a Board of Directors and Officers, instead of all owners), and Ease of Transfer (selling) of ownership interest through the stock exchange. • Corporations NOT listed on a stock exchange are referred to as "Closely Held". • A "Closely Held" may elect be a disregarded entity for tax purposes, like a general
partnership, by making the "Subchapter S" tax election if: Note: Shareholders in a closely held corporation that elects subchapter s tax status still have limited liability. Recommended textbook solutions
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Mathematics with Business Applications5th EditionMcGraw-Hill Education 3,755 solutions Recommended textbook solutionsBusiness Math17th EditionMary Hansen 3,734 solutions Mathematics with Business Applications6th EditionMcGraw-Hill Education 3,760 solutions Business Math17th EditionMary Hansen 3,734 solutions Mathematics with Business Applications5th EditionMcGraw-Hill Education 3,755 solutions a. Legal capital: Par value multiplied by the number of shares issued. This represents the minimum amount of assets that should be maintained as a protection for creditors. b. Par value of stock: An arbitrary value that is assigned to a share of stock usually at the time of incorporation. Par value, historically, has represented the maximum liability of the investor. c. Stated value of stock: An arbitrary value that is assigned to a share of stock by the board of directors. It has little relevance to investors or creditors. d. Market value of stock: The price that must be paid to purchase a share of stock. e. Book value of stock: The amount of equity of one share of stock, i.e., (assets liabilities) divided by the number of shares of stock outstanding. f. Authorized shares of stock: The number of shares that a corporation has been authorized by the state to issue. g. Issued stock: Stock that has been sold to shareholders. h. Outstanding stock: Issued stock that is owned by outside parties, i.e., stock that has been issued and not repurchased by the corporation. i. Treasury stock: Previously issued stock that has been repurchased by the corporation. j. Common stock: A class of stock that possesses certain rights usually not given to other classes of stock. These rights include the right to share in the distribution of profits, the right to share in the distribution of corporate assets upon liquidation, the right to vote on certain matters that affect the corporate charter, and the right to participate in the selection of directors for the corporation. k. Preferred stock: A class of stock that is given preferential treatment over common shareholders in some matters, usually in the distribution of earnings. However, certain other shareholder rights may not be present; for instance, voting rights. l. Dividends: Distributions of corporate profits to shareholders. Which of the following types of businesses is owned by one individual?Sole Proprietorship
This is a business run by one individual for his or her own benefit. It is the simplest form of business organization.
What is owned by one individual?Sole proprietorship definition
A sole proprietorship is a business owned by an individual. A sole proprietor works for themselves rather than being employed by a company and takes on all legal and financial responsibilities for the business.
What is this type of business which is owned by a single individual who is singly responsible for running the business?A sole proprietorship is a business that is run by a single individual who makes all the decisions, although the proprietor may engage employees. The sole proprietor is personally entitled to all of the profits and is responsible for any debts that the business incurs.
What is a sole proprietor entity?A sole proprietor is someone who owns an unincorporated business by himself or herself. However, if you are the sole member of a domestic limited liability company (LLC), you are not a sole proprietor if you elect to treat the LLC as a corporation.
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Which of the following types of business entities is owned by one individual quizlet?
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