Sole Proprietorship Case Study

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Sole Proprietorship Business
Characteristic of Sole Proprietorship
Sole proprietorship is authorized, controlled, financed and controlled by only one person. The manager can hire a few workers or operators to assist him with the business.
The sole proprietorship allotted under the Business Registration Act 1956 where this type of company is easily established and forms the greatest number of registered companies in Malaysia. The registration fee for a sole proprietor is only RM60. Examples of a sole proprietorship: Mini markets, restaurants, convenient stores, burger kiosks, etc.
Advantages
Disadvantages Easiest to exist and start. Unlimited personal liability.
Complete control.
Difficult to raise the money. Single owner saves all the profits.
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Limited finance.
Liability of Sole Proprietorship
Sole Proprietorship is defined as an unlimited liability, legally, a sole proprietor is personally liable for all of the obligations of the company. Moreover, if anyone has a reason to prosecute your business, they’ll be able to come after your personal property, not only the money that you have in your company checking account. But also if the suit is for enough money, you could end up wasting almost all of your ownership for example: your car, your profits, and perhaps your home.
There are many advantages and disadvantages of a sole proprietorship. The advantages of that is the business owners can keep complete control of their activities, and in the law, may make decisions as they see suitable. Secondly the sole proprietorship can able to forming easily and cheap because there are no special rules like permission from state. On the other hand, the disadvantages of unlimited liability are the company and personal assets may be at danger. Also, it is hard to find external investors to support sole proprietorship, and that means the growth possible is very limited behind a particular point.

Computation of taxable business income
Investment income and
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Calculation
Investment Income The formula for net investment income is: Net Investment Income = Capital Gains + Dividends + Interest Income - Administrative Fees
Example Let’s assume Fund ABC is reporting its performance results for the year. It has invested in a portfolio of growth stocks, income stocks and corporate bonds. The growth stocks realized a capital gain of $100,000, the income stocks realized a capital loss of $50,000 but also paid out $10,000 in dividends, and the corporate bonds maintained their value and paid out $20,000 in interest. Fund ABC paid $5,000 in administrative fees. ( Net Investment Income, 2017) Using the formula, Fund ABC's net investment income is: Net Investment Income = ($100,000 - $50,000) + ($10,000) + ($20,000) - ($5,000) = $75,000

The formula for net investment expense is: Miscellaneous itemized deductions are generally limited to the amount of expenses over and above 2% of your adjusted gross income (AGI). In other words, there’s a floor below which you lose the ability to

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