Match the appropriate business form to the legal/tax implications:
(Points : 10)
|1 : The least regulated form of business ownership. This firm type is taxed as an individual. Control and liability lies with the proprietor.|
|2 : Tax exempt corporation that must comply with state and federal regulations and reporting requirements.|
|3 : Limited Liability Corporation: States recognize this limited liability form (like a corporation) and it has pass-through taxation benefits but allows for different types of members including other corporations. For tax purposes, the Federal government does not recognize this corporation type and requires them to file as either a proprietorship, sole proprietorship or a corporation.|
|4 : Tax treatment of this corporation is exactly like that of a partnership. The most notable provision of this corporation is that it serves as a conduit for its net income, passing all of its profits or losses through to the individual shareholders, which means that its income is taxed only once at the individual tax rate.|
|5 : Corporations are subject o more legal, reporting, and financial requirements than other forms of ownership. Before stockholders receive a penny of its net income as dividends, a corporation must pay these taxes at the corporate tax rate, a graduated tax on corporate profits. Then stockholders must pay taxes on the dividends they receive from these same profits at the individual tax rate.|
|6 : Each agent for the business and can legally bind the firm and, hence, the other agents to contracts, even without the remaining agents’ knowledge or consent. Each agent is taxed as an individual based on distributed share of profit from the business.|
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