The Professional Personal Chef 1 Chapter 2 Forms of Ownership

The Professional Personal Chef2 Sole Proprietorship Single owner Single owner –Simplest form of business Easy to start or dissolve Easy to start or dissolve Responsible for all liabilities Responsible for all liabilities Operator has complete control Operator has complete control Receives all income from the business Receives all income from the business

The Professional Personal Chef3 Partnership Two or more people Two or more people –Each contributes to the business –Each share in both the profits and losses A partnership agreement defines the roles of each partner A partnership agreement defines the roles of each partner

The Professional Personal Chef4 Different Forms Of Partnerships General partnership General partnership –Assumes all partners are equal Unless defined by the partnership agreement Unless defined by the partnership agreement Limited partnership Limited partnership –Offers some liability protection to each partner’s Joint venture Joint venture –Limited time partnership

The Professional Personal Chef5 Corporation Issues stock Issues stock –Pays dividends to shareholders Subchapter S (Sub S) Subchapter S (Sub S) –Avoids double taxation –Exempt from some federal tax’s Limited liability company (LLC) Limited liability company (LLC) –Taxed as a partnership

The Professional Personal Chef6 Taxes Form of ownership effects tax liabilities Form of ownership effects tax liabilities Four general taxes Four general taxes –Income –Self-employment –Employment –Excise

The Professional Personal Chef7 Other Taxes Sales tax Sales tax –Pass-through tax –Paid for service or products FICA & FUTA FICA & FUTA –Federal Insurance Contributions Act –Federal Unemployment Tax Act