ignment Saved Help Save & E makes sense for their business. The goal of this click and drag is to demonstrate your understanding of the risks and liabilities, formalities and expenses, and income tax rules when selecting a type of business formation. Review the statements and scenarios listed. Place each selection into one of the columns to denote which business formation is being described and if the statement is an advantage or disadvantage of that business formation option. Double Taxation Business Responsibility Ease of Formation Limited Financial Resources Limited Liability Availability of Capital and Credit SOLE PROPRIETORSHIP PARTNERSHIP PRIVATE CORPORATION Advantage Disadvantage Help Save & Exit This activity is important because each form of business offers different benefits, regardless of whether the business is a traditional "bricks and mortar" company, an online-only one, or a combination of both. A business's legal form of ownership affects how it operates, how much taxes it pays, and how much control its owners have. The goal of this exercise is to demonstrate your understanding of the factors that influence business ownership RT Taxes: After years of preparing taxes for his extended family, Ronald began a tax-consultant business from his home office. He hires assistants as needed but does all of the management and main services himself. Pet Perfect: John, with an expertise in sales, and Francine, with experience in management, opened a pet shop together, sharing profits and responsibilities equally. 1 Scream Inc.: A group of friends began an ice cream factory. Because there was a certain amount of risk in whether it would succeed, the friends didn't want to lose their homes over it-plus they wanted those who helped with the startup costs to have a share of the profits. Joypass: Samantha, Fabian, and Jonah had a brilliant idea for an online game portal. Because it was a startup, they wanted to retain as much money as possible to survive the initial years, not assume any personal risk should it not succeed, and appear credible and serious to other organizations and individuals they would like to do business with Town doctor: Dr. O'Reilly was disenchanted with the policies at the hospital where he'd worked for many years and decided to open an office on his own. He wanted his personal assets protected in case of malpractice but didn't want the hassle that comes along with traditional Incorporating Personal higher rate: The owner of this organization pays taxes only on the personal level but at a higher rate than others. He or she benefits in tax-exempt accounts for retirement and profit sharing. No company tax: The owners of this organization each pay taxes on the profits they receive but do not pay taxes directly. Double taxation: Since this organization's profits are taxed on the company level and again when the dividends are passed on to shareholders, they are in essence paying taxes twice on the same income. Personal taxation only: This organization is taxed exactly like a partnership with owners paying only personal taxes at the normal Income tax rate. Prev 1 of 7 !!! Next > Select the most appropriate type of business ownership for each company and taxation type listed below. Note that one taxation type is appropriate to two different types of business ownership. 1. RT Taxes Sole proprietorship 2. Pet Perfect Partnership 3. 1 Scream Inc Corporation 4. Joypass LLC 5. Town doctor Scorporation . 6. Personal/higher rate Sole proprietorship 7. No company tax Partnership 8. Double taxation Corporation . 9. Personal taxation only Sole proprietorship and Partnership Prev 1 of 7 !!! Next >