Purchase Solution

Taxes, liability and administration

Not what you're looking for?

Ask Custom Question

You and a friend are considering forming a business organization to manufacture and sell widgets. You suspect that the company will show a loss during the first two years of operation. You also know that another manufacturer of widgets has suffered three product liability lawsuits totaling $300,000 within the past year. Additionally, you are married to a doctor who makes a very high annual income.

What form of business organizations should be selected under the circumstances? Fully explain why you selected this form?

Discuss: taxes, liability and administration.

Purchase this Solution
Solution Summary

The solution goes into a great amount of detail about the tax and liability implications of the different business structures. The solution also recommends the ideal business structure for the situation given in the questions. Overall, an excellent response.

Solution Preview

I would open a Limited Liability Partnership with myself being a limited partner.

Tax Implications: The LLP will not be taxed. All profit and losses will flow through me and I would be taxed at an individual level. Since the LLP is expected to suffer losses in the first two years, I would benefit from these losses. Since my spouse is a doctor with a high income, these losses will reduce my total income ...

Purchase this Solution
Free BrainMass Quizzes
Academic Reading and Writing: Critical Thinking

Importance of Critical Thinking

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.

Team Development Strategies

This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.

Six Sigma for Process Improvement

A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.

Organizational Behavior (OB)

The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.

View More Free Quizzes
Related BrainMass Solutions

  • This posting addresses several accounting topics.

    from the W-2s to the social security administration, which further verifies to the social security administration the amounts that were withheld for payroll taxes during the year.

  • Liability Protection and Taxes

    44969 Liability Protection and Taxes Is liability protection more important than taxes? why? Please see response attached, which is also presented below. I hope this helps and take care. RESPONSE: 1.

  • Taxable Income, Tax Liability, Tax Burden

    Calculation of taxable income, tax liability, and tax burden (percentage)

  • What is the corporate tax liability for last year?

    1) Dividend paid is not an expense and hence its not considered 2) Taxes= Tax rate * Profit before taxes This solutin shows how to determine the corporate tax liability for last year with calculations and answer.

  • ledger of Shumway Software Company

    of a detailed explanation to prepare current liability entries, adjusting entries, and current liabilities section.

  • Accounting for Decision Making

    (d) Loss caused when the Food and Drug Administration prohibited the manufacture and sale of a product line.

  • Valuation and international taxation (Peripatetic Enterprises)

    The profits, which are fully and immediately repatriated, and the foreign taxes paid for the current year are shown here: Poland Sweden Earnings before interest and taxes (EBIT) $80 million $100 million Host country taxes paid

  • Balance Sheet: Current Liability

    Wages and Salaries Expense $480,000 Withholding Taxes Payable $ 80,000 FICA Taxes Payable $29,900 Union Dues Payable $9,000 Cash $361,100 Calculation: FICA Taxes Payable=[($480,000 - $140,000) X 7.65% = $26,010 $140,000

  • Role of Cost in Decision Making in Healthcare Industry

    Real estate taxes b. Clinic telephone expense c. Oil for the heat for the whole facility d. Emergency room medical supplies e. Liability insurance f. Nursing wages for the operating room g.

View More Related Solutions