1. Chapter 14: Business Entities Chapter 14 Business Entities

2.  2005 Kaplan Financial 2 Chapter 14: Business Entities Business Entities One of the major decisions confronting a business owner from a tax and legal perspective concerns selecting the form in which the business will operate.

3.  2005 Kaplan Financial 3 Chapter 14: Business Entities Business Entities Sole proprietorship Partnership Limited liability partnership Corporation S corporation Limited liability company

4.  2005 Kaplan Financial 4 Chapter 14: Business Entities Sole Proprietorship Management operation and decision- making Legal liability Taxation Tax ramifications of formation, business operation

5.  2005 Kaplan Financial 5 Chapter 14: Business Entities Partnership Management operation and decision-making General partnership Limited partnership Legal liability General partnership Limited partnership Taxation Flow-through entity Tax ramifications of formation, business operation, withdrawals or distributions

6.  2005 Kaplan Financial 6 Chapter 14: Business Entities Limited Liability Partnership Management operation and decision- making Legal liability Taxation

7.  2005 Kaplan Financial 7 Chapter 14: Business Entities Corporation Management operation Directors, Board of directors, Officers Legal liability Taxation Tax ramifications of formation, business operation, withdrawals or distributions Double taxation of dividends

8.  2005 Kaplan Financial 8 Chapter 14: Business Entities S Corporation Management operation and decision- making Legal liability Taxation Tax ramifications of formation, business operation, withdrawals or distributions

9.  2005 Kaplan Financial 9 Chapter 14: Business Entities Limited Liability Company Management operation and decision- making Members – LLC owners Managers – LLC management Legal liability Taxation Tax ramifications of formation, business operation

10.  2005 Kaplan Financial 10 Chapter 14: Business Entities Selecting the Proper Business Form Factors to be considered in selecting a business entity: Simplicity of formation and operation Ownership restrictions Limited liability Management operations Tax characteristics Startup losses Double taxation of dividends