ࡱ> ac`7 bjbjUU "|7|7|l bbbb n 3z$ |::n, 3 V b8  03RI BLI ."Types of Corporations Worksheet 1. Who can incorporate?Anyone who operates a business, including non-profit or charitable organizations General Corporation 2.How many stockholders can you have in a general corporation?An unlimited number3.How much do stockholders risk when they invest in a general corporation?Only the amount of their investment4.How do you transfer ownership in a general corporation?By selling the stock5.How does incorporation protect business owners?Protects personal assets of the owners from business debt and liability6.What is the major tax disadvantage of a general corporation? (Hint: Look at the table)Double Taxation the income is taxed twice, once as corporate income and again as personal income of shareholders7.Do you have to have to ask for permission from the state to incorporate your business? Explain.Yes. They must file with the state for permission8.What does the term double taxation mean to a general corporation?It means that the profits from the business are taxed twiceonce as corporate income and again as personal income of shareholders Close Corporation 9.How many stockholders can a close corporation have?They are limited to 30-50 stockholders10.What type of business is a close corporation best suited for?A group of individuals who will own the corporation, with some member actively involved in the management of the company and others who are only involved on a limited or indirect level11.Are there any restrictions on who a close corporation can sell stock to? If so, what are the restrictions? Yes. They must first offer the shares to existing stockholders before selling to new shareholdersS Corporation 12.How is an S Corporation different than a General Corporation?It has a special tax designation through the IRS13.What added benefit does an S Corporation receive that a General or Close Corporation does not?Special IRS tax provisions14.What does the term double taxation mean to an S Corporation?S Corporations avoid double taxation because all income or losses are reported only once on the personal tax returns of the shareholders.15.According the current tax laws, what is the maximum number of shareholders allowed for an S Corporation?7516.Can a person become a shareholder in an S Corporation if they are not a resident of the United States?No. Shareholders must be U.S. residents17. What four types of businesses are NOT eligible for S Corporation status?Financial institutions that are banks Insurance companies taxed under Subchapter L Domestic International Sales Corporations (DISCs) Certain affiliated groups of corporations18.What are the steps to becoming an S Corporation?Form a general, close, or professional corporation in the state of your choice Obtain a formal consent of the corporations shareholders and record in corporations minutes Once filing is approved, file IRS Form 2553, Election by a Small Business Corporation and file with the IRS by the appropriate deadline Limited Liability Company (LLC) 19.Why do many professionals believe that LLCs are a superior alternative to corporations and partnerships?Because they combine many of the advantages of both20.What are the four main advantages of an LLC?Protection of personal assets from business debt Profits/losses pass through to personal income tax returns of owners Great flexibility in management and organization of the business LLCs do not have the ownership restrictions of S Corporations, making them ideal business structures for foreign investors 21.What is the maximum limit of shareholders in an LLC?No maximum limit22.How does management of an LLC differ from that of an S Corporation?An S Corporation is managed by a board of directors and officers of the corporation, and an LLC can be managed by either the owners (Member-Managed) or by one or more managers (Manager-Managed) Comparison of Business Structures 23.Take a look at the Business Entity Comparison Table. Explain which type of business entity you would choose for our virtual business. Justify your answers by giving at least 4 advantages and 4 disadvantages of the type of business entity as it relates to the type of business we have chosen. 24.Go online and research at least 2 other businesses similar to ours. Give the name of the business and identify type of business or corporate structure they have chosen (i.e. Sole Proprietorship, Partnership, General Corporation, Close Corporation, S Corporation, or Limited Liability Company (LLC)) !<Hl=Scutuv+ , - X Y Z  B    s   -:u5>* 5CJaJ 5B*ph5CJ(OJQJaJ(L !%:;<yLy$$Ifl40h$`# t0644 la$If$a$SMM$If/$$d%d&d'd-DM NOPQa${$$Ifl4Q0h$ # t0644 laX$Ify$$Ifl40%`L$ t0d&644 laF4~~$If{$$Ifl4Q0% L$ t0d&644 laFGHl$Ify$$Ifl40%`L$ t0d&644 lalmp~~$If{$$Ifl4c0% L$ t0d&644 la\$Ify$$Ifl40%`L$ t0d&644 la~~$If{$$Ifl4Q0% L$ t0d&644 la=($Ify$$Ifl40%`L$ t0d&644 la=>Ap~~$If{$$Ifl4c0% L$ t0d&644 la$Ify$$Ifl40%`L$ t0d&644 las~~$If{$$Ifl4c0% L$ t0d&644 lastu$Ify$$Ifl40%`L$ t0d&644 la ~~$If{$$Ifl4Q0% L$ t0d&644 lat~~$If{$$Ifl4Q0%`L$ t0d&644 latuvSMM$If/$$d%d&d'd-DM NOPQa${$$Ifl4Q0% L$ t0d&644 la$Ify$$Ifl40X%`# t0d&644 la+ ~~$If{$$Ifl40X% # t0d&644 la+ , - $Ify$$Ifl40X%`# t0d&644 la X ~~$If{$$Ifl4c0X% # t0d&644 laX Y Z $Ify$$Ifl40X%`# t0d&644 la  UOO$If/$$d%d&d'd-DM NOPQa${$$Ifl40X% # t0d&644 la   A $Ify$$Ifl40%`L$ t0d&644 laA B F ~~$If{$$Ifl40% L$ t0d&644 la t$Ify$$Ifl40%`L$ t0d&644 la  ~~$If{$$Ifl4c0% L$ t0d&644 la   0$Ify$$Ifl40%`L$ t0d&644 la ~~$If{$$Ifl4Q0% L$ t0d&644 la    $Ify$$Ifl40%`L$ t0d&644 la  q ~~$If{$$Ifl4c0% L$ t0d&644 laq r s $Ify$$Ifl40%`L$ t0d&644 la <~~~$If{$$Ifl4c0% L$ t0d&644 la @s$Ify$$Ifl40%`L$ t0d&644 la~~$If{$$Ifl4Q0% L$ t0d&644 la$ ~ttt & F$If$If{$$Ifl4Q0%`L$ t0d&644 la    -1SMM$If/$$d%d&d'd-DM NOPQa${$$Ifl4Q0% L$ t0d&644 la$Ify$$Ifl40%`L$ t0d&644 la~~$If{$$Ifl4Q0% L$ t0d&644 la7|89vvvv & F$If$Ify$$Ifl40%`L$ t0d&644 la9:>s~~$If{$$Ifl4c0% L$ t0d&644 lastuL$Ify$$Ifl40%`L$ t0d&644 la$~~$If{$$Ifl4Q0% L$ t0d&644 la$Ify$$Ifl40%`L$ t0d&644 laSMM$If/$$d%d&d'd-DM NOPQa${$$Ifl4c0% L$ t0d&644 la $Ify$$Ifl40%`L$ t0d&644 la~~$If{$$Ifl4Q0% L$ t0d&644 la ~~$If{$$Ifl4Q0%`L$ t0d&644 la{$$Ifl4Q0% L$ t0d&644 la 1h/ =!"#$% i8@8 NormalCJ_HaJmH sH tH <A@< Default Paragraph Font| z z z 5 !%:;<FGHlmp=>Astutuv+,-XYZABF     q r s  @ s $   7 | 89:>stu000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000 0 0 00 0 0 0 000000000000000000000000000000 Fl=st+ X  A   q  9s  !"#$%&'()*+,-./0123456789:;<=k q X ] 6 7 { 7fguJerry:H:\Janets Web Page\Types of Corporations Worksheet-KEY.docI]w5D^`o(. ^`hH. pLp^p`LhH. @ @ ^@ `hH. ^`hH. L^`LhH. ^`hH. ^`hH. PLP^P`LhH.hhh^h`OJQJo(hHh88^8`OJQJ^Jo(hHoh^`OJQJo(hHh  ^ `OJQJo(hHh  ^ `OJQJ^Jo(hHohxx^x`OJQJo(hHhHH^H`OJQJo(hHh^`OJQJ^Jo(hHoh^`OJQJo(hHI]w                  !%:;<FGHlmp=>Astutu+,-XYZABF     q r s - 1    9:>stu@A>@@UnknownGz Times New Roman5Symbol3& z ArialG Bodoni MT Black?5 z Courier New;Wingdings"qh]ZF]ZFi Yxr0dU 3 2QHPTypes of Corporations WorksheetEGUSDJerryOh+'0 $ @ L Xdlt| Types of Corporations WorksheetypeEGUSDofGUSGUS Normal.dotrJerry.d2rrMicrosoft Word 9.0n@@.ې@.ې՜.+,0( hp  "Elk Grove Unified School District U  Types of Corporations Worksheet Title  !"#$%&'()*+,-./0123456789:;<=>@ABCDEFGHIJKLMNOQRSTUVWYZ[\]^_bRoot Entry Fd1Table?I WordDocument"|SummaryInformation(PDocumentSummaryInformation8XCompObjjObjectPool  FMicrosoft Word Document MSWordDocWord.Document.89q