Purchase Solution

Liability Protection and Taxes

Not what you're looking for?

Ask Custom Question

Is liability protection more important than taxes? why?

Purchase this Solution
Solution Summary

This solution explains liability protection and taxes, and whether one is considered more important than the other. The rationale is also provided.

Solution Preview

Please see response attached, which is also presented below. I hope this helps and take care.

RESPONSE:

1. Is liability protection more important than taxes? why?

Both are important, but because they are different in nature it is really difficult to compare the two on importance. It is kind of like comparing apples and oranges. And also, when considering the importance, it depends who you talk to (i.e., the business or the government who imposes the taxes). Let's take a closer look.

Whereas liability protection is insurance that is purchased by the business to protect the business, the state and government impose taxes to protect the country (supposedly).

Liability Protection

Liability insurance is defined as that insurance, which pays and renders service on behalf of an insured for loss arising out of her responsibility to others imposed by law or assumed by contract. The implied ...

Purchase this Solution
Free BrainMass Quizzes
Understanding the Accounting Equation

These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.

Business Ethics Awareness Strategy

This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.

Employee Orientation

Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.

Basic Social Media Concepts

The quiz will test your knowledge on basic social media concepts.

Marketing Research and Forecasting

The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.

View More Free Quizzes
Related BrainMass Solutions

  • Partnership, corporation and limited liability

    A corporation pays taxes on its own income, which is taxed at the normal corporation tax rate. Taxes would be less for a partnership or for an LLC. An LLC (limited liability corporation) would offer the most protection against lawsuits and torts.

  • Types of business entities and how they are taxed

    These give shareholders the most liability protection and space from contracts and debts. Profits for a C corp. are taxed at a corporate level when it's earned income and at separate shareholders levels.

  • Choosing an Appropriate Business Ownership Model

    He will be responsible for income and employment taxes. This offers some tax benefits. Since Buddy has two workers and occasionally rents out his equipment, Buddy would benefit from the liability protection of this option.

  • Difference in owner's liability for the general business debts

    Explain the difference in owner's liability for the general business debts of a limited liability company (LLC) and a limited liability partnership (LLP). The main difference among these business structures has to do with liability protection.

  • Corporate Income Taxes

    They are recognized as separate legal entities and generally provide shareholders with the same liability protection afforded by C corporations. For Federal income tax purposes, however, taxation of S corporations resembles that of partnerships.

  • Types of Business Ownership

    The corporation must abide by its Articles of Incorporation and must maintain regular board meetings in order to stay legally compliant. A limited liability company offers intense legal protection for its owners.

  • What is a flow-through entity?

    The most common flow through entities are: Partnerships - Has General and joint liability Limited Liability companies ( Has personal liability protection) S Corporations ( Has personal liability protection) Please note that a general partnership

  • different forms of business organization

    However, as regards to protection to the entity's liabilities, the owners get more protection from the corporation form.

  • Roles of limited liability partnerships

    Some of the major roles of limited liability partnership are as follows: It provides strong protection to all the partners, which can be related to debt, risk and obligations, etc.

View More Related Solutions