ACCT 001 Lecture Notes - Lecture 25: Limited Liability Partnership, Limited Liability, Double Taxation

• School: College of The Sequoias
• Department: Accounting (ACCT)
• Course: ACCT 001
• Professor: williams

Document Summary

Proprietorship an unincorporated business owned by one individual. Partnership a legal arrangement between two or more people who go into business. The advantages are the same as proprietorships with expense, regulation, and tax. The disadvantages also include unlimited liability and difficulty raising capital. Corporations a legal entity created by a state, and it is separate and distinct from its owners and managers. It is that separation that limits stockholder"s losses to that of their principal. Advantages: limited liability, unlimited life, easier to raise capital. S corporation taxed as if they were proprietorships or partnerships, thus avoiding the double taxation. These firms can have no more than 100 stockholders which regulates this status useful to only small firms. Limited liability corporation or limited liability partnership popular organization type that is a hybrid between a proprietorship and a corporation (llps are used by accounting, law, and architecture firms). These have limited liability but aren"t subject to corporate taxation.