Need business and finance help with three types of business organizations

timer Asked: Nov 15th, 2015
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Question Description

In 1819 the U.S. Supreme Court Chief Justice John Marshall defined a corporations as "an artificial being, invisible, intangible, and existing only in the contemplation of law." Since the corporation functions separately from its owners it can be sued and the owners are not liable for the debts. What are some other distinctions between these three types of business? Explain.

Tutor Answer

School: Carnegie Mellon University

Thank you for the opportunity to help you with your question!

The 3 main types of businesses in the United States are:  "Sole Proprietorship," "Partnership," and "Corporation"

Recently that has changed to 5 types of businesses. Two new types are "S corporation," and "Limited Liability Company (LLC)."

In a Sole Proprietorship, the business is owned and operated by one person.   The fees to maintain a Sole Proprietorship are cheaper than the Partnership and Corporation.  This type of business is more dangerous however, because if the business is sued in court, all of the personal assets of the business owner is at risk.Income from a sole proprietorship business is reported on the owner's 1040 tax return, and he/she has to fill out schedule C.

In a Partnership, all the partners own a piece of the business.  There as separate forms to fill out on the income for the partnership's tax return.Form 1065 US Return of Partnership Income.  If a lawsuit is filed against a Partnership, the individual partner's assets are at risk.

In a corporation, prospective shareholders exchange money, property, or both, for the corporation's capital stock. A corporation generally takes the same deductions as a sole proprietorship to figure its taxable income. A corporation can also take special deductions. For federal income tax purposes, a C corporation is recognized as a separate taxpaying entity. A corporation conducts business, realizes net income or loss, pays taxes and distributes profits to shareholders.

Please let me know if you need any clarification. I'm always happy to answer your questions.

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Tutor went the extra mile to help me with this essay. Citations were a bit shaky but I appreciated how well he handled APA styles and how ok he was to change them even though I didnt specify. Got a B+ which is believable and acceptable.

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