Music Business

Business Entities (2)

The Music Telegraph | Text 2019/02/22 [11:50]
Music Business

Business Entities (2)

The Music Telegraph| 입력 : 2019/02/22 [11:50]

▲ Types of entities

© Berkman Solutions



 

Business Entities (2)

 

 

If you resell goods, you will need a resale permit issued by the appropriate tax authority. You, as the sole proprietor, are the only one who makes decisions on how the business should operate and what its focus should be. With a proprietorship, you enjoy all the profits, but must absorb all the losses. Employees do not participate in the ownership. A proprietor who has employees must withhold income and social security taxes, unemployment, and other insurances required by state and federal law and must submit the withheld sums to the appropriate government collecting agent. While a proprietorship usually has fewer regulatory and record keeping requirements than a partnership or corporation, the ones on which you must focus are the reports to be filed with the local, state, and federal taxing authorities. If you are going to start your own proprietorship and hire employees, be certain to contact each of those authorities to obtain the required forms and instructional booklets that tell you what to do. Frequently, a good bookkeeper or accountant will be able to assist you with that part of your business.

 

 

 

As a proprietorship, you are responsible for your acts and, in general, the acts of your employees. If, for example, you or one of your employees should injure someone in a car accident while promoting your record to radio stations, you would be responsible to compensate the injured party. A judgment against you would enable the judgment creditor (the person who won the suit and to whom you owe the money) to look to all your assets, both business and personal, to recover on the judgment.

 

 

 

The entire income of a proprietor, assuming there is no loss, is taxable income, while business expenses and losses are deductible from income. Proprietors, as self-employed, must file quarterly estimated income tax returns and make prepayment of anticipated taxes with the Internal Revenue Service and the state taxing authorities. The estimated tax is based on a projection of expected income during your first year of business and thereafter on your prior years taxes. You should consult an accountant who has a tax orientation to assist you in these matters.

 

 

 

Partnerships

Assuming that your band of one, or your one-person record or publishing company has grown to tow or more people who share the profits and losses, and you plan to stay business for a while, you now have a partnership. A partnership is defined as an association of two or more persons conducting a business on a continuing a basis as co-owners for profit. The relationship among the partners usually is governed by a written partnership agreement that details the rights and responsibilities of each partner. Although you do not need a written contract to be considered a partnership, obtaining a written partnership agreement is recommended. If there is no written partnership agreement, then state statutes control the relation of the partners with each other. The partners can be individuals, other partnerships, corporations, or a combination of each. Each parent contributes property, services, and/or money to the business of the partnership. Partners also may loan property, money, or services to the partnership.

 

 

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