Justin Rolando Decided to Operate His Own Web Design Firm

question 36

Multiple Choice

Justin Rolando decided to operate his own Web design firm and is leaning toward organizing it as a sole proprietorship.What is one factor Justin should realize in choosing this form of business?

• A)He will be creating a business that is legally separate and distinct from himself.
• B)He will be required to fill out special forms and pay proprietorship fees to get the company legally established.
• C)He will incur the problem of double taxation.
• D)He will be exposing himself to unlimited personal liability for the company's debts.

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Definitions:

Fixed Formula

A predetermined method or calculation used to determine allocations, such as budget distributions or compensation adjustments, based on set criteria.

Profit-sharing Plans

A type of incentive plan that distributes a portion of an organization's profits to its employees, linking compensation to the company's financial performance.

Designing

The act of creating, planning, and executing a plan or structure for a project, system, or object with specific objectives in mind.

Nonmonetary Reward Plan

A scheme that recognizes and rewards employees through means other than financial compensation, such as recognition or flexible work hours.