Sole Proprietorship Tax Implications

Summary

A sole proprietorship is not a tax-paying entity for federal income tax purposes. The income is reported on the individuals personal income tax return, and the individual pays the tax on it. A limited liability company (LLC) is owned by members who may elect to manage the business. Generally, a partner in a general partnership is not entitled to a salary. A promoter conducts pre-incorporation activities. A partnership consists of two or more persons, sharing in management and profits. Partners have joint and several liability for torts. Fiduciary duties arise in various contexts. A disinterested director exercises sound business judgment. Shareholders file derivative actions on behalf of the corporation. Corporations have directors, shareholders, and officers. Preferred stock can have various features. Sole proprietors have complete control. Shareholders vote based on shares owned. Corporations have personhood and can attract capital. Ohio lobbying statutes require reporting certain expenditures. Corporations must file a registration statement with the SEC for

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are you sure its not all of the above
I apologize for any confusion. The answer choice D, "All of the above", would be incorrect because:
- A sole proprietorship is an unincorporated business owned and run by one individual, not partners (A is incorrect).
- Partners do not assume personal liability in a sole proprietorship because there are no partners in this business structure (C is incorrect).
So, only option B is correct for a sole proprietorship.
A _____ is owned by members who may elect to manage the business. A. limited liability company B. partnership C. corporation D. limited partnership
The correct answer is A. A limited liability company (LLC) is owned by members who may elect to manage the business.
Generally, a partner in a general partnership is not entitled to _____. A. a share in the profits B. liability for the debts and obligations of the business C. a salary D. management of the business
The correct answer is C. Generally, a partner in a general partnership is not entitled to a salary. Partners share the profits and losses of the business, but they do not receive a salary like employees.
are you sure its not b
Apologies for any confusion, but the answer is C. In a general partnership, partners are indeed liable for the debts and obligations of the business (option B is true). However, they typically do not receive a salary but share in the profits and losses (option C).
A _____ will conduct pre-incorporation activities on behalf of a soon-to-be incorporated business, such as leasing facilities. A. subscriber B. promoter C. incorporator D. shareholder
The correct answer is B. A promoter will conduct pre-incorporation activities on behalf of a soon-to-be incorporated business, such as leasing facilities.
A partnership consists of _____. A. two or more persons B. sharing in the management of a business C. sharing in the profits of a business D. All of the above.
The correct answer is D. A partnership consists of all of the above: two or more persons, sharing in the management of a business, and sharing in the profits of the business.
The liability of partners for a tort committed in the course of ordinary business is described as _____. A. joint and several B. concurrent C. joint D. several
The correct answer is A. The liability of partners for a tort committed in the course of ordinary business is described as joint and several.
Fiduciary duties may arises in which of the following contexts? A. Agency and employment relationships B. Serving as the trustee of a trust C. Serrving as the legal guardian of another person D. All fo the above
The correct answer is D. Fiduciary duties may arise in all of the above contexts: Agency and employment relationships, serving as the trustee of a trust, and serving as the legal guardian of another person.
A disinterested director acting upon the best available information and the rational belief that a transaction is within the best interests of a business is said to be exercising _____. A. sound business judgment B. good faith C. an honest belief D. reasonableness
The correct answer is A. A disinterested director acting upon the best available information and the rational belief that a transaction is within the best interests of a business is said to be exercising sound business judgment.
A shareholder derivative action is organized and filed by _____ on behalf of a/the _____, alleging damages due to reckless or grossly negligent corporate management. A. shareholders; directors B. shareholders; corporation C. directors; officers D. government; people
The correct answer is B. A shareholder derivative action is organized and filed by shareholders on behalf of the corporation, alleging damages due to reckless or grossly negligent corporate management.
Which of the following roles are present in a corporation? A. Directors B. Shareholders C. All of the above. D. Officers
The correct answer is C. All of the above. In a corporation, you can have Directors, Shareholders, and Officers.
Which of the following may be a feature of prefered stock? A. Liquidation Preference B. Dividend Preference C. Debt Features D. All of the Above
The correct answer is D. All of the Above. Preferred stock can have features like liquidation preference, dividend preference, and debt features. These terms can vary depending on the company's charter and the specific terms of the preferred stock agreement.
Which of the following is an advantage of a sole proprietorship? A. Owners of sole proprietorships can raise a lot of capital quickly B. The existence of the sole proprietorship doesn't depend upon the sole proprietor. C. The owner of a sole proprietorship has complete control over the business. D. The owner of a sole proprietorship has no liability for the debts and liabilities of the business.
The correct answer is C. The owner of a sole proprietorship has complete control over the business. This is an advantage of a sole proprietorship as decisions can be made quickly without requiring approval from partners or a board.
Generally, shareholders elect directors to the board of directors of a coporation by voting based upon _____. A. the amount of shares of stock the shareholders own B. the amount of debt the shareholders own C. the value of their membership interests D. the value of their partnership interests
The correct answer is A. Generally, shareholders elect directors to the board of directors of a corporation by voting based on the amount of shares of stock the shareholders own.
Which of the following is true of a corporation? A. All corporations are not tax-paying entities for federal income tax purposes. B. A corporation has "person hood," i.e., a life apart from its owners. C. A corporation can function to attract more capital than any other form of business. D. B & C
The correct answer is D. Both B and C are true of a corporation. A corporation has "personhood," meaning it has a separate legal existence from its owners. Also, a corporation can attract more capital than any other form of business due to its ability to issue shares of stock.
Which of the following must be reported as an expenditure under Ohio lobbying statutes? A. A gift from a lobbyist to a reportable person costing less than $*.* so long as the reportable person has accepted no other gifts that year. B. A meal costing less than $*.* so long as the reportable person has accepted no other gifts that year. C. A car purchased by a reportable person for the same price that the car can be purchased by the general public. D. A car purchased by a reportable person for a lower price than the car can be purchased by the general public.
The correct answer is D. Under Ohio lobbying statutes, a car purchased by a reportable person for a lower price than the car can be purchased by the general public must be reported as an expenditure.
are you sure its not c
I apologize for any confusion, but answer D is correct. In Ohio, if a reportable person purchases a car at a discounted price not available to the general public, it must be reported as an expenditure under lobbying statutes. Answer C is not considered an expenditure as it's at market price.
Before selling more than $* million of securities to the public, a corporation must file a _____ with the SEC and gain SEC approval for the sale. A. notice of annual meeting B. partnership agreement C. operating agreement D. registration statement
The correct answer is D. Before selling more than $* million of securities to the public, a corporation must file a registration statement with the Securities and Exchange Commission (SEC) and gain SEC approval for the sale.
Rule * of Regulation D of the Securities and Exchange Act permits the sale of up to $* million in securities within a twelve-month period without requiring _____. A. the adoption of by-laws B. an operating agreement C. submission of a registration statement D. notice to shareholders
The correct answer is C. Rule * of Regulation D of the Securities and Exchange Act permits the sale of up to $* million in securities within a twelve-month period without requiring the submission of a registration statement.
In-kind contributions may be described as contributions that are _____. A. forwarded from the contributor or contributors to the recipient by a lobbyist B. directed to a clearly identified candidate or authorized committee through an intermediary or conduit C. goods, services or property offered free or at less than the usual and normal charge D. received by a committee from a contributor or contributors, but credited to another person recognized by the committee as raising the money
The correct answer is C. In-kind contributions may be described as goods, services, or property offered for free or at less than the usual and normal charge.