CLU - Business Owners
3 Business Problems and Planning Objectives - answer1. form of business
2. business continuity
3. compensation and fringe-benefits
4 Risk Exposures of Closely Held Businesses - answer1. losses to business property
2. consequential losses
3. liability to third parties
4. personal exposures
7 Factors in Choosing the Form of Business Organization - answer1. ease and expense
of formation
2. control
3. flexibility in operations
4. ability to raise capital
5. owner liability
6. tax burden
7. compensation and benefits for owners
What is the limit on number of members in an LLC? And in an S Corp? - answerNone,
in an LLC
100, in an S Corp
How does the doctrine of joint and several liability affect the liability of the general
partner? - answerThe general partner is always ultimately individually liabile for claims
against the partnership.
What is the limited partner's expose to losses? - answerOnly the capital contributed to
the partnership
How can a partnership limit the liability of the general partner? - answerMake a
corporation the general partner
What is at risk to the general and limited partners in an LLP or RLLP? - answerThe
assets of the partnership
Limits on the firm's obligations arising from negligence and misconduct of other partners
How can a professional LLP protect a partner from liability? - answerThe partner is still
liabile for his own actions, but he is not personally liable for the malpractice of another
partner in the LLP
, What is the only form of business ownership with a different tax liabilities for the owner
and for the business? - answerC Corporation
3 Pass-Through Entities - answer1. partnerships
2. LLCs
3. S Corporations
Can a business owner pass through business losses? - answerYes, which is largely the
point
How is corporate salary above a "reasonable compensation" level taxed? - answerAs a
dividend payment
What is the flat federal tax rate on personal services corporations? - answer35%
What is the deduction allowed for "domestic production activities"? - answer9% of
domestic production income
Without a formula in the partnership agreement, what is the default for apportioning
income? - answerPro-rata based on ownership interests
4 Risk Exposures in Closedly Held Businesses - answer1. loss of business property
2. resulting loss of income or increase in expenses
3. third party liability due to business activity
4. personnel exposures
The person who holds property for another is known as?
The property they hold is known as? - answerThe bailee
The bailment
5 Benefits available under Worker Compensation - answer1. medical benefits -- usually
unlimited
2. indemnification for lost income -- limited amount, duration
3. death benefits
4. specific benefits for permanent injuries
5. rehabilitation benefits
Tenants in Partnership - answerAll partners own an undivided interest in partnership
property
Can use for business use, but no individual right to personal use or transfer without
partners' consent
What two federal tax forms must a partnership complete? - answerForm 1065
Schedule K - 1
What is the deduction limit for business start-up costs? - answer$5,000
3 Business Problems and Planning Objectives - answer1. form of business
2. business continuity
3. compensation and fringe-benefits
4 Risk Exposures of Closely Held Businesses - answer1. losses to business property
2. consequential losses
3. liability to third parties
4. personal exposures
7 Factors in Choosing the Form of Business Organization - answer1. ease and expense
of formation
2. control
3. flexibility in operations
4. ability to raise capital
5. owner liability
6. tax burden
7. compensation and benefits for owners
What is the limit on number of members in an LLC? And in an S Corp? - answerNone,
in an LLC
100, in an S Corp
How does the doctrine of joint and several liability affect the liability of the general
partner? - answerThe general partner is always ultimately individually liabile for claims
against the partnership.
What is the limited partner's expose to losses? - answerOnly the capital contributed to
the partnership
How can a partnership limit the liability of the general partner? - answerMake a
corporation the general partner
What is at risk to the general and limited partners in an LLP or RLLP? - answerThe
assets of the partnership
Limits on the firm's obligations arising from negligence and misconduct of other partners
How can a professional LLP protect a partner from liability? - answerThe partner is still
liabile for his own actions, but he is not personally liable for the malpractice of another
partner in the LLP
, What is the only form of business ownership with a different tax liabilities for the owner
and for the business? - answerC Corporation
3 Pass-Through Entities - answer1. partnerships
2. LLCs
3. S Corporations
Can a business owner pass through business losses? - answerYes, which is largely the
point
How is corporate salary above a "reasonable compensation" level taxed? - answerAs a
dividend payment
What is the flat federal tax rate on personal services corporations? - answer35%
What is the deduction allowed for "domestic production activities"? - answer9% of
domestic production income
Without a formula in the partnership agreement, what is the default for apportioning
income? - answerPro-rata based on ownership interests
4 Risk Exposures in Closedly Held Businesses - answer1. loss of business property
2. resulting loss of income or increase in expenses
3. third party liability due to business activity
4. personnel exposures
The person who holds property for another is known as?
The property they hold is known as? - answerThe bailee
The bailment
5 Benefits available under Worker Compensation - answer1. medical benefits -- usually
unlimited
2. indemnification for lost income -- limited amount, duration
3. death benefits
4. specific benefits for permanent injuries
5. rehabilitation benefits
Tenants in Partnership - answerAll partners own an undivided interest in partnership
property
Can use for business use, but no individual right to personal use or transfer without
partners' consent
What two federal tax forms must a partnership complete? - answerForm 1065
Schedule K - 1
What is the deduction limit for business start-up costs? - answer$5,000
