Innovations and Entrepreneurship Exam
Partnership Agreements · Key information to include in a partnership agreement · Difference between general partners and limited partners in terms of management and liability
Although each partnership agreement differs based on business objectives, certain terms should be detailed in the document, including percentage of ownership, division of profit and loss, length of the partnership, decision making and resolving disputes, partner authority, and withdrawal or death of a partner. A general partnership is the most common type of partnership. It refers to a relationship in which all partners contribute to the day-to-day management of the business. Each partner will have the authority to make business decisions and even legally bind the company in contracts. The liabilities, contributions, and responsibilities of the partners are often equal unless stated otherwise. Typically, a partnership agreement will describe which partners have certain authorities and responsibilities. A limited partnership is a relationship where one or more partners are not involved in the day-to-day management of the business. ... A general partner may invest money into the company. However, a general partner may also be personally liable for the debts of the company, while the limited partner is not.
Creating a Limited Liability Company · Basic benefits of LLC selection · Selection of taxation for an LLC · Management and financing of an LLC
State laws governing LLCs may vary, but typically LLCs offer five main advantages for new businesses. Run Your Own Show. Limit Your Personal Liability. Avoid Double Taxation and Pass-Through Deduction. Less Administrative Hassles and Paperwork. Flexibility in Sharing Profits. The IRS treats one-member LLCs as sole proprietorships for tax purposes. This means that the LLC itself does not pay taxes and does not have to file a return with the IRS. As the sole owner of your LLC, you must report all profits (or losses) of the LLC on Schedule C and submit it with your 1040 tax return. By default, LLCs with more than one member are treated as partnerships and taxed under Subchapter K of the Internal Revenue Code. However, an LLC can elect to be treated as an association taxable as a corporation by filing Form 8832, Entity Classification Election. Funding Your LLC Evaluate Your Own Assets. ... Contact Your Personal Network for Informal Loans. ... Invite New Members to Your LLC Team. ... Look into Credit Cards for Short-Term Financing. ... Apply for Conventional Loans From Institutional Lenders. ... Check Out Government-Sponsored Grant and Loan Programs. ... Connect with Peer-to-Peer Lending Sites.
Legal Forms of Organizations · Basic forms of organizations: Limited Liability · Basic tax implications of the different forms of organization · Basic legal liability implications of different forms of organization
The IRS treats one-member LLCs as sole proprietorships for tax purposes. This means that the LLC itself does not pay taxes and does not have to file a return with the IRS. As the sole owner of your LLC, you must report all profits (or losses) of the LLC on Schedule C and submit it with your 1040 tax return. -What Is Limited Liability? Limited liability is a type of legal structure for an organization where a corporate loss will not exceed the amount invested in a partnership or limited liability company. In other words, investors' and owners' private assets are not at risk if the company fails.
Pay and Benefits · Basics of Worker's Compensation insurance - basics, purpose · Requirements for doing payroll (fed and state forms, numbers) · Basics difference between employees and independent contractors · Basic payroll taxes YOU pay, what comes from employee wages
The Purpose of Workers' Compensation Because an injured worker and his or her family can experience sudden hardship caused by the unexpected loss of income,workers' compensation benefits are intended to provide injured workers with a way to pay bills and medical costs during the recovery period. - Employer Identification Number (EIN) ... State/Local Tax ID Number. ... State Unemployment ID Number. ... Employee Addresses and SSNs. ... I-9. ... W-4. ... State Withholding Allowance Certificate. ... Department of Labor (DOL) Records. -A business may pay an independent contractor and an employee for the same or similar work, but there are important legal differences between the two. For the employee, the company withholds income tax, Social Security, and Medicare from wages paid. For the independent contractor, the company does not withhold taxes. -The two main federal payroll taxes levied on wages are known as Federal Insurance Contributions Act (FICA) taxes. Employees and employers both pay FICA taxes: employees usually have them withheld from their paychecks, while employers pay them in addition to any other taxes they owe. Employer Payroll Taxes The employer portion of payroll taxes includes the following: Social Security taxes(6.2 percent up to the annual maximum) Medicare taxes(1.45 percent of wages) Federal unemployment taxes(FUTA)
Employment Law and Independent Contractors o Basic discrimination laws o Wage and hours laws - minimum wage and overtime laws o Key procedures with employee termination o What defines and independent contractor versus employee
Title VII of the Civil Rights Act of 1964. Title VII of the Civil Rights Act, as amended, protects employees and job applicants from employment discrimination based on race, color, religion, sex and national origin. -The Fair Labor Standards Act of 1938Covered nonexempt workers are entitled to a minimum wage of not less than $7.25 per hour effective July 24, 2009. Overtime pay at a rate not less than one and one-half times the regular rate of pay is required after 40 hours of work in a workweek. - Document Issue the last paycheck. ... Give severance pay. ... Retrieve business property. ... Explain COBRA. ... End child support withholding. ... Conduct an exit interview. ... Update your payroll. ... Talk to remaining employees.Handle unemployment benefits -Basically, an independent contractor is an independent business person who runs his or her own business but who does work for another business. An employee is hired by a company to perform specific work at the direction of the employer.
Naming your Business and Products · Basic procedures in naming your business - reviewing possible names, name selection, registering your name · Mandatory naming procedures for corporations and LLCs · Difference between trademarks, service marks, brand names · Protection of trademarks
- Identify and trade mark -Searching the Secretary of State -Broader search if you plan to expand - Looking into domain names -Your new LLC's name must be distinguishable from any other business name either registered or reserved with the Minnesota Secretary of State's office. The name must include the words "Limited Liability Company" or the abbreviation "LLC" at the end. It may not include the words "Corporation," "Incorporated" or the abbreviations "Inc." or "Corp." It is also not allowed to include a word or phrase that states or implies that it is organized for some purpose other than a legal business purpose. You can reserve an available LLC name for up to 12 months for $35. -Choosing a name for a corporation is a formal process, just as it is for a limited partnership or a limited liability company. A corporate name has to be registered with the secretary of state's office. The corporate name must be unique and not be in use or reserved for another corporation. If the corporate name you choose is already in use when you file your articles of incorporation, the secretary of state's office will reject your articles of incorporation. You can call the secretary of state's office to find out in advance whether a particular name is available. Or if you have access to certain online services like Lexis/Nexis, a legal research database, you can electronically search your state's database of names to see which names are available. -A service mark (or servicemark) is a word, phrase, symbol or logo that is used to brand, identify, and distinguish a service. This is in contrast to a trademark, which is a word, phrase, symbol or logo that is used to brand, identify, and distinguish a product. -Brand name is a name given by the maker to a product or range of products, especially a trademark. a familiar or widely known name. -Trademark protection refers to safeguarding intellectual property rights to protect a trademark from counterfeiting and infringement. A trademark is an established or legally registered mark that identifies a manufacturer's unique goods and services.
Licenses and Permits · Main forms of licenses and permits for small businesses · Accessing information regarding licenses and permits · Differences among federal, state, regional, and local permits / licenses · Basic knowledge of zoning regulations and procedures
-General business licenses Tax registrations Health permits State-issued occupational licenses Liquor licenses Lottery licenses Reseller's licenses -Complete these forms and remit them with the necessary fees. Research and apply for any additional licenses your particular type of business requires in your state through your Department of Licensing or the U.S. Small Business Administration's Business.gov License & Permit finder. Zoning and land-use permits Health department permits Zoning is the legislative process for dividing land into zones for different uses. Zoning laws are the laws that regulate the use of land and structures built upon it. ... Protecting the value and enjoyment of properties by allowing a property its most appropriate land use given its location and surrounding uses. In a nutshell, zoning requirements determine how you can use the land and what type of structures can be built (i.e. residential, commercial, etc.), while building requirements (or codes) are a set of standards that all structures must meet to ensure safety. What are Local Zoning Requirements?
Insuring your Business · Main forms of insurance you need to have · Additional types of insurance you might carry · Process for selecting insurance coverage, amounts, and deductibles · Ways to save money on insurance premiums
-Professional liability insurance. ... Property insurance. ... Workers' compensation insurance. ... Home-based businesses. ... Product liability insurance. ... Vehicle insurance. ... Business interruption insurance. -Terrorism, Underground Storage Tank,Pollution Liability and Environmental insurance -Carriers that offer really low rates may be new to the market, or a policy with a lower premium may not provide as much coverage. Ask each potential insurer, "What are your deductibles on the policy?" A deductible is the amount you will be responsible for paying if you file a claim. A lower deductible often means you are paying a higher premium, and vice-versa, so you need to decide what makes the most sense for your situation. - Shop your coverage with several providers. ... Bundle with a business owner's policy. ... Consider a different kind of bundle. ... Evaluate your protection and your risks. ... Increase your deductible. ... Is there a claims-free discount?
Creating a Corporation · Basic steps in forming a corporation · Difference between C and S corporations - structure and taxes · Additional legal and filing requirements for corporations
1. Choose a Corporate Name 2. Prepare and File Articles of Incorporation 3. Appoint a Registered Agent 4. Set Up a Corporate Records Book 5. Prepare Corporate Bylaws 6. Appoint Initial Corporate Directors The biggest difference between C and S corporations is taxes. A C corporation pays tax on its income, plus you pay tax on whatever income you receive as an owner or employee. An S corporation doesn't pay tax. Instead, you and the other owners report the company revenue as personal income To form your own corporation, you must take these essential steps. ... Appoint the initial directors of your corporation. File formal paperwork, usually called "articles of incorporation," and pay a filing fee that ranges from $100 to $800, depending on the state where you incorporate.
Legal Forms of Organizations · Basic forms of organizations: partnerships · Basic tax implications of the different forms of organization · Basic legal liability implications of different forms of organization
A partnership is not a separate tax entity from its owners; instead, it's what the IRS calls a "pass-through entity." This means the partnership itself does not pay any income taxes on profits. Business income simply "passes through" the business to the partners, who report their share of profits (or losses) on their individual income tax returns. As a pass-through business entity owner, partners in a partnership may be able to deduct 20% of their business income with the 20% pass-through deduction established under the Tax Cuts and Jobs Act. See The 20% Pass-Through Tax Deduction for Business Owners for more information. In addition, each partner must make quarterly estimated tax payments to the IRS each year. While the partnership itself doesn't pay taxes, it must file IRS Form 1065, an informational return, each year. This form sets out each partner's share of the partnership profits (or losses), which the IRS reviews to make sure the partners are reporting their income correctly. In a general partnership, each partner has unlimited personal liability. Partnership rules usually dictate that whatever debts are incurred by the business, it is the legal responsibility of all partners to pay them off.
Pay and Benefits · Main laws affecting recruitment and hiring · Minimum wage laws / regulations - who it applies to · Overtime compensations laws / calculations · Required "time off" for employees - required accommodations
According to the BC Human Rights Code (Discrimination in employment advertisements), you must not publish job postings or advertisements that give preference to: Race Colour Ancestry Place of origin Political belief Religion Marital status Family status Physical or mental disability Sex Sexual orientation Gender identity or expression Age -The federal minimum wage applies to workers who have positions with enterprises that qualify for coverage under the Fair Labor Standards Act. These organizations and businesses must employ at least two people and meet one of two additional qualifying standards, according to the U.S. Department of Labor. On January 1, 2019, the minimum wage increased to $12 per hour for employers with 26 or more employees and $11 per hour for employees with 25 or fewer employees. The minimum wage shall be adjusted on a yearly basis through 2023 according to the pre-set schedule shown above. -A reasonable accommodation is assistance or changes to a position or workplace that will enable an employee to do his or her job despite having a disability. Under the ADA, employers are required to provide reasonable accommodations to qualified employees with disabilities, unless doing so would pose an undue hardship. Time-off benefits for employees can be offered at the employer's discretion, but several are mandated by federal and/or state law. Required time-off benefits include time off to vote, jury duty leave, family and medical leave, pregnancy or maternity leave, and military leave.
Legal Forms of Organizations · Basic forms of organizations: sole propietiership · Basic tax implications of the different forms of organization · Basic legal liability implications of different forms of organization
Basic forms:The sole proprietorship is the simplest business form under which one can operate a business. The sole proprietorship is not a legal entity. It simply refers to a person who owns the business and is personally responsible for its debts. -The income from a sole proprietorship is taxed at your individual income tax rates and you include the entire amount on your taxes, even if you don't take the money out of the sole proprietorship. For example, if you fall in the 28 percent tax bracket, your sole proprietorship income is taxed at 28 percent. -A sole proprietor can be held personally liable for any business-related obligation. This means that if your business doesn't pay a supplier, defaults on a debt, or loses a lawsuit, the creditor can legally come after your house or other possessions.
Tax Basics · Obtaining an Employer Identification Number · Procedure for selection S-corporation status · Operating expenses and business deductions - limitations
Be a domestic corporation Have only allowable shareholdersMay be individuals, certain trusts, and estates andMay not be partnerships, corporations or non-resident alien shareholders Have no more than 100 shareholders Have only one class of stock Not be an ineligible corporation (i.e. certain financial institutions, insurance companies, and domestic international sales corporations). In order to become an S corporation, the corporation must submit Form 2553 Election by a Small Business Corporation (PDF) signed by all the shareholders. See the Instructions for Form 2553 (PDF) for all required information and to determine where to file the form. Filing Requirements: Chart 1 - S Corporation -Fully Deductible Business Expenses "necessary to do business": Accounting Fees Advertising Contract Labor cost Employee benefit programs Insurance Some of it can be deducted: Gifts to clients meals and entertainment miles driven for business Home office expenses Non-deductible "no way Jose": though they might be directly related to your trade or profession, including bribes and kickbacks—which are often illegal to begin with—and contributions to political parties or candidates. Dues and membership fees you might pay for social clubs are not deductible, nor are lobbying expenses, penalties, and fines.
Legal Forms of Organizations · Basic forms of organizations: Corps · Basic tax implications of the different forms of organization · Basic legal liability implications of different forms of organization
Four main types of corporations exist in the United States: C corporations. S corporations. Limited Liability Companies (LLCs) Nonprofit Organizations. The profit of a corporation is taxed to the corporation when earned, and then is taxed to the shareholders when distributed as dividends. This creates a double tax. The corporation does not get a tax deduction when it distributes dividends to shareholders. Shareholders cannot deduct any loss of the corporation. -Generally, shareholders are not personally liable for the debts of the corporation. Creditors can only collect on their debts by going after the assets of the corporation. Shareholders will usually only be on the hook if they cosigned or personally guaranteed the corporation's debts. An owner of a corporation can be held personally liable if he or she: personally and directly injures someone. personally guarantees a bank loan or a business debt on which the corporation defaults. fails to deposit taxes withheld from employees' wages.
Lease Agreements · Main forms of leases - net, triple net, etc. · What to include in a lease agreement · Elements of leases that are negotiable
In an absolute net lease, the tenant takes care of the entire burden, including insurance, taxes, roof, and maintenance. The absolute type is common in single-tenant systems, where the property owner builds housing units to suit the needs of a tenant. The proprietor turns over the finished unit to the tenant for a specified duration. The triple net lease comes with three expense categories associated with it: insurance, maintenance, and real property taxes. Such expenses are also known as pass-through or operating expenses because the property owner passed them all to the tenant in the form of rent excesses. In some cases, the excesses are referred to as taxes, insurance, and common area (TICAM). The modified gross lease transfers the entire burden onto the property owner. Based on the terms, the owner pays all the insurance, property taxes, as well as the common area maintenance. On the other hand, the tenant shoulders janitorial, utility, and interior maintenance costs. Net lease refers to a contractual agreement where a lessee pays a portion or all of the taxes, insurance fees and maintenance costs for a property in addition to rent. -Names of all tenants. ... Limits on occupancy. ... Term of the tenancy. ... Rent. ... Deposits and fees. ... Repairs and maintenance. ... Entry to rental property. ... Restrictions on tenant illegal activity.
Employment Law and Independent Contractors o I-9 and W-4 forms - what they are, when you need them o Information to include in job descriptions and advertisements o Illegal questions in job applications and job interviews o Parameters of testing for job applicants / new hires
The Purpose of the IRS W-4 Form. When you get a new job, one of the many pieces of paper your employer will ask you to complete is IRS form W-4, Employee's Withholding Allowance Certificate. The way you fill out this form determines how much tax your employer will withhold from your paycheck. Form I-9 is used for verifying the identity and employment authorization of individuals hired for employment in the United States. All U.S. employers must ensure proper completion of Form I-9 for each individual they hire for employment in the United States. This includes citizens and noncitizens. -Here are 9 essential points to include in your recruitment ad: Catchy Job Title. ... 'Must-Haves' vs. 'Nice-to-Haves' ... Location of the Position. ... Employment Type. ... Details On How to Apply. ... Include Rewards. ...Contact Person for Inquiries. ... Description of Your Company. -Illegal Job Interview Questions Age. Race, ethnicity, or color. Gender or sex. Country of national origin or birthplace. Religion. Disability. Marital or family status or pregnancy. - Parameters:Skill Set Relevance, Enthusiasm, Communication Skills, Body Language, Compatibility for work environment,