10. Establishment of a sole proprietorship is not relatively easy. 11. Which of the following entities...

10. Establishment of a sole proprietorship is not relatively easy.

11. Which of the following entities does not have limited liability?
a. General partnership.
b. LLC taxed as a disregarded entity.
c. S corporation.
d. All of the above have limited liability.
12. True/False: Income that is generated from a sole proprietorship, net of expenses, is not subject to
income tax and self-employment tax.
13. Each of the following is a characteristic of a sole proprietorship EXCEPT:
a. Sole proprietorships are easy to establish but have complex administration.
b. An advantage of sole proprietorships is that income flows through and is not subject to
double taxation.
c. Limited liability is not an advantage of sole proprietorships.
d. All income, net of expenses, is subject to self-employment taxes.

Solutions

Expert Solution

10. Incorporation of a sole proprietorship is an easy process. Due to the ease of formation, a sole proprietorship is the most favored form of organizing a business.

11. The organisation does not have a limited liability is :

A general partnership and sole proprietorship does not have a limited liability. The general partnership and sole proprietorship are subject to unlimited taxes and the business assets and owners assets are not viewed as separate from the business assets.

The correct option is option a.

12. False

Income that is generated by sole -proprietorship is subject to both self-employment taxes and the income taxes.

We shall compute our business income tax by completing a Schedule C form, then we will add this income, along with self-employment taxes on this business income, to your personal tax return. The sole proprietorship will have to pay income taxes on his personal income .

13. The sole proprietorship is the most easy and non complex and simplest from of business organisation, the administration a sole proprietorship is also easy as there is a single owner so there are no conflicts.

So, the correct option is option a.

The income for the sole proprietorship is subject to double taxation.

The sole proprietorship has unlimited liability .

All income of sole proprietorship is subject to self-employment taxes.

jeff jeffy answered 8 months ago

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