Business Entities: Choices As Defined Within The State Of Texas

3745 words - 15 pages

Business Entities: Choices as Defined within the State of Texas

Francesca Garcia

Electing a single entity may be the most important decision for an entrepreneur in relation to the creation of their business. Today there are several entity options available for entrepreneurs. If he or she has had no previous knowledge of business entities then they may not fully recognize the crucial role the selection of an entity plays in the business’ taxation procedure. The tax liability one is responsible for depends greatly upon the election of a particular entity whether it is a Limited Liability Partnership, Limited Partnership, Limited Liability Company, S corporation, C Corporation, or a ...view middle of the document...

The limitation of a partner’s liability for debts or obligations includes acts of or arising from errors, omissions, negligence, incompetence, or malfeasance committed by others in the partnership. Texas regulation also goes on to cover a partner’s liability of acts another partner or a representative of the partnership not working under the supervision or direction of the partner at the time the acts resulting in liability occurred. On the other hand, the document provided by the Secretary of State goes on to specifically state that this limitation does not protect the partner who was directly involved or who had notice or knowledge of the activity in which the errors, omissions, negligence, incompetence or malfeasance were committed. The provisions do not protect the partnership’s assets for partnership debts and obligation as it has shielded the liability of a partner not directly involved in an unlawful activity. However, the regulations explicitly require that the partnership attain insurance or segregate funds to cover judgments related to errors, omissions, negligence, or malfeasance.

Example: Suppose a $500,000 judgment is placed on a Company A because someone mistakenly reported an inaccurate figure for tax purposes. The IRS found that the fault was not committed with intent by any particular partner of the company. Because of this finding the insurance will pay the full amount.
None of the partners in the company will be responsible for paying any portion of the $500,000 judgment.
Limited Partnership
Another type of business entity is the limited partnership. A limited partnership is very similar to that of a general partnership. A limited partnership has two classes of partners. It must have at least one general and limited partner. The general partner in a Limited Partnership generally possesses the same rights and responsibilities as if he was in a general partnership. These rights and responsibilities include: the right to participate in the management of the partnership and unlimited liability for all partnership debts. In a limited partnership the Limited Partners accept the responsibility of limited liability which means that they are only liable for debts incurred by the company to the extent of their own documented capital investment plus any additional amount he or she has committed to contribute.

Example: John and Eric both are limited partners in Company B. John has invested twenty-five percent into Company B while Eric has invested the other seventy-five percent. If Company B incurs a $100,000 judgment then both John and Eric are responsible to pay this debt because they have accepted the responsibility of being a limited partner. The total amount of John’s liability amounts to $25,000 while Eric’s liability equals $75,000 because the judgment is limited to their own individual invested capital of twenty-five and seventy-five percent, respectively.
This distinction is made...

Other Papers Like Business Entities: Choices As Defined Within The State Of Texas

Outline The Process For Developing Nursing Standards Of Practice And Identify The Different Entities That Might Be Involved In Developing A Standard Of Practice

303 words - 2 pages implementing standards of care we are able to provide excellent care to out patients. Different entities that might be involved in developing a standard of practice are The American nurses Association and the Joint Commission on Accreditation of Healthcare Organization (JACHO) have established and recognized standards of care. Standards of care are found at the national and state level. State boards of nursing develop standards of care at the state

Using Named Examples, Examine The Extent To Which The Development Gap Occurs Within Countries As Well As Globally

746 words - 3 pages are within countries, particularly the NIC’s and BRIC countries, where rapidly growing economies have benefitted the few at the expense of the majority poor. China is an excellent example of this. Chinas booming economy over the last 15 years came about as they turned their back on the communist economic model in favour of the free market economy. The liberalisation of their markets and the mobilisation of 1 billion workers allowed huge wealth to

Tanya Trucker Vs The State Of Confusion

1370 words - 6 pages ruling proceeded by the original trial judge, it will be required to show that there was indeed an error made as well as how and why that error effected the final outcome of the trial. (Mack Law, 2010). Laws are created for reasons such as protection of our communities and rights of the citizens and businesses within. Tanya has exercised her right to file a law suit in order to protect her business from paying extra fees. The reasons for the B

Compare The Challenges Or Selected Business Activities Within Selected Organisation In Two Different Economic Environments

1078 words - 5 pages M2 - Compare the challenges or selected business activities within selected organisation in two different economic environments In this task I will compare the challenges to selected business activities in two different economic environments. | Supply | Economic | Waitrose | Availability of raw materials and labour – Waitrose are impacted by this because the less raw materials there are, the harder it is for them to meet the demand on

Case Study: The Business Strategies Of Qvc

2536 words - 11 pages initial cost and time investments placed them in a leading position within the home shopping network. Achieving Efficiency in Operations In order to run an effective business and make money doing so, companies must ensure a high level of efficiency in their operations. This will keep expenses as low as possible, in turn yielding higher profits. In order to be cost efficient QVC has developed and acted upon several principles: provide shopping

Evaluate The Methods You Used To Collect The Data For A Geographical Investigation. State The Title Of The Investigation

443 words - 2 pages would have to measure 20 pebbles within the quadrat. One participant would be measuring all 20 pebbles, this can get tedious, therefore the results at the start of the investigation could be more reliable and accurate than those collected at the end of the investigation due to lack of motivation. Furthermore as there were so many pebbles to measure within the allocated time period, this could have made some of the readings inaccurate however in

Hpv As A Causative Agent In The Development Of Cancer

2420 words - 10 pages ). The authors state further that there is an increase in the prevalence of HPV induced head and neck cancer. Based on their study in which they identified the combination of the “HPV core miRNA” and how closely it is related to the HPV infection (Lajer et al 2012). Therefore, they conclude that there is evidence that HPV infection can lead to head and neck cancers. As previously mentioned there are a number of HPV infections that have been

The Effects Of Vinegar As A Stain Remover

1223 words - 5 pages The Potential Uses of Vinegar As an Alternative Battery An Investigatory Project Presented to: Sir John Samuel Ramos Masters Vineyard Academy Taytay, Rizal By: Sangki, Ben A. Santiago, Joseph Angelo S. I. Introduction A. Background of the Study Other appliances in our house may be battery operated. Some branded batteries are expensive but it is not long lasting. So as students

Sports, Media, And The Fans: The Business Of Selling Sports

5363 words - 22 pages broadcasting companies at the time – NBC in particular - were both involved in the business of making and selling television sets and needed content that would cause customers to buy sets. All providers needed content that drew in viewers, and sports fans would need to buy the providers services to continue to watch their teams. The number of televisions grew substantially following 1950, as “only 9% of American homes” had televisions in that year

An Analysis Into The Rise Of Arab Nationalism Following The Establishment Of The State Of Israel Post-1948 And Its Impacts

1745 words - 7 pages An analysis into the rise of Arab Nationalism following the establishment of the State of Israel post-1948 and its impacts November, 2012 The main catalyst for the rise of Arab nationalism throughout the Arab world stemmed from the creation of the state of Israel in 1948. Israel's creation as the result of Zionist Jewish nationalism led to a counter-reaction in the peoples of Arab states - including Palestine - which was focused on

The Role Of Accounting To Business And Society

980 words - 4 pages responsibilities every day, consequently, closing that window of opportunity and allowing better supervision within an organization. Conclusion Accounting is an important discipline to all for profit or not for profit business entities and society as a whole. This comes from the fact that it allows society to make rational and ethical or sound decisions regarding its financial strength and business resources. For example, it empowers

Related Essays

Manager Role Within Functional Areas Of Business

890 words - 4 pages order for a manager to be successful he or she has to embrace and understand the management role. Robbins and Coulter (2012) defined a manager as “someone who coordinates and oversees the work of other people so that organizational goals can be accomplished” (p. 6) ROLE OF A MANAGER WITHIN THE FUNCTIONAL AREAS OF BUSINESS A manager must understand this definition in order to perform effectively the four functions of management

The Roles Of A Manger Within The Fucntional Areas Of Business

745 words - 3 pages The Roles of a Manager within the Functional Areas of Business MGT/521 February 14, 2015 Professor The Roles of a Manager within the Functional Areas of Business The role of a manager is very broad and it exists across all industries ranging from larger public corporations, states governments, profit and non-profit entities, to small private businesses and within all levels of each organization. An organization is composed of 10

Consideration Of Fraud Within Small Business Organization

1468 words - 6 pages Consideration of Fraud within Small Business Organizations Introduction In recent studies made by Klynveld, Peat, Marwick and Goerdeler, LLC (KPMG), Fraud and Misconduct survey 2010 shows “The value of frauds committed by employees has double during the past two years with the average case now costing victims $3 million. The survey found that 61% of cases, there was no recovery of cash stolen, and that the average time to detect

“The Role Of Women As Entrepreneurs And Business Leaders In Saudi Arabia: Business And Ethical Implications”

2411 words - 10 pages detrimental factor for a complete woman’s emancipation in the business field. The determination of the recent success cases of women entrepreneurs in this country, however, is motivating for other women to follow these examples and to enter as protagonists of the economic life of Saudi Arabia. ANALYSIS OF THE STATE OF WOMEN ENTERPREUNIAL IN SAUDI ARABIA A comprehensive analysis of major data and evidences highlighted in this essay makes