Tuesday, April 20, 2010

BENEFITS AND WEAKNESSES OF 5 DIFFERENT BUSINESS MODELS. Sole Proprietorship. Partnership. Corporation. Limited Liability Company (LLC). Nonprofit Organization.


In order to sign contracts and conduct commerce in the modern world, a business must be established as a legal entity. There are several types of legal entities to choose from. Each type has benefits and weaknesses and the choice of the type of business entity depends on the owners, their motivations, and often their tax status. The main reasons for adopting one type of legal status over another is to manage the liability that can be associated with various business activities, and to avoid personal harm in the event of a lawsuit.

1) Sole Proprietorship
A sole proprietorship is a business that is owned by one person, like Joey’s Lemonade Stand. Joey is the sole proprietor, or owner, of his business. In most cases, a sole proprietorship is the same as the person who runs the business. So if Joey wants to buy a new table for his business, he would buy it using his own money and the ownership of the table would probably be in Joey’s own name. The benefit of this type of legal entity is that it is the simplest to manage (often no paperwork or lawyers are required). The drawback of this type of business entity is that there is no difference between Joey’s personal assets (such as his train set, his bike, or his piggy bank) and the assets of the business (Joey’s lemonade stand table). So if Joey gets sued by someone who claims he got sick from drinking Joey’s lemonade, Joey’s train set might be used to compensate the person who got sick.
2) Partnership
 3) Corporation
4) Limited Liability Company (LLC)
A limited liability company (LLC) is sort of a cross between a corporation and a sole proprietorship or partnership. It is a relatively recent invention in the United States, and is patterned after its older German cousin, the GmbH (Gesellschaft mit beschränkter Haftung). Most LLCs are formed by professionals, such as accountants, doctors, lawyers, interior designers, and so forth.
The main benefits are that there is much less paperwork to establish and maintain an LLC, and like a corporation, the liability of the owners is limited to the amount of capital put into the LLC (which is often very low in the case of professionals) and the owners avoid double taxation since the profits are taxed on the owners’ personal tax returns. Another benefit of the LLC is that it can choose how it wants to operate for U.S. tax purposes. In the early years, when it has more losses than profits, it can be a sole proprietorship and the losses will go against the owner’s personal income statement. In later years, the LLC can choose to operate and report its profit as a corporation so that the owner avoids self-employment taxes.
The disadvantages of an LLC are that some states levy high fees or franchise taxes on these entities, the LLC can end up with a short lifespan due to the death of one of the owners, it can be difficult to raise money from investors, and the accounting requirements of an LLC are greater than those for sole proprietorships and partnerships.

5) Nonprofit Organization
A nonprofit organization or not-for-profit corporation (nonprofit) is a company that is organized under the jurisdiction of a government authority and has no shareholders. It does not issue stock. A nonprofit organization usually engages in some sort of societal good, such as charity work, a homeowners’ association, a foundation to explore research, and so on. Sometimes nonprofits are incorporated, but they are exempt from taxation by government law. The idea of a nonprofit organization is that its goal is not to make a profit, but to pour any and all money into the primary purpose of the organization (funding cancer research, operating a boy scout troop, providing wheelchairs for the physically challenged, building a clean water supply for a Malaysian village, etc.). Most nonprofits are funded by donations from individuals and/or corporations or by grants from governments.
The benefit of a nonprofit is that it does not pay income or sales taxes, and it may qualify for reduced rates on goods and services that it purchases. The drawback is that it must comply with strict rules and reporting requirements on how it generates and disposes of its income. Some nonprofits have financing restrictions as well (that is, they cannot borrow money). The largest nonprofit in the world is the Bill and Melinda Gates Foundation, which has an endowment, or pile of cash, of $61 billion. (Bill Gates is one of the founders of Microsoft.)


Wednesday, April 14, 2010

Build your gold investment portfolio during sterling gold Performance.

From most investment asset classes, gold investment still showed strong return on investment after smashing US$1,100 barriers. Investors opt to invest in gold for several reasons. Gold investment offers security and protection during period of economic turbulence. During economic or political turmoil, people tend to shift their investment into safer option. Gold is often viewed as the preferred safe haven investment option, as it can increase in value during times of economic volatility. Gold investment help to protect yourself against fluctuation in the stock market and therefore can be seen as a wealth preserver. Historically, when stock and bond markets have fallen, the price of gold and other precious metals has tended to increase. In addition it is used as a hedge against the US dollar. Gold is liquid asset, so therefore you can easily to sell and buy in the market.

It is a wise to build your gold investment portfolio during rising performance of gold investment now.
It is easy to buy gold over the internet now – you can check the gold prices, sell and buy gold coins, and monitor your gold investment performance in real time. If you are looking for expert guidance on building gold and precious metals investment portfolio, try GoldCoinsGain. It is an Aurum Advisors online resource for gold coin and gold bullion acquisition. They provide expert guidance on whether to buy gold coins, buy gold bullion, or other precious metals.

Gold bullion coins are coins minted and guaranteed by various different governments. There are several choices you can choose: Gold South African Kruggerrand, Austrian Gold Philharmonic, Gold American Eagle, Chinese Gold Panda, Gold Canadian Maple Leaf, American Buffalo, or Australian Gold Nugget. For certified gold coins, you can choose: $20 Saint Gaudens Double Eagle and $2.5 Liberty Quarter Eagle. Apart from gold coins, other precious metals like silver and platinum are good choices. You can choose: American Silver Eagle, American Platinum Eagle, Canadian Platinum Maple Leaf, Canadian Silver Maple Leaf, Silver Rounds.

So start investing in gold with goldcoinsgain now.


Wednesday, April 7, 2010

The Different Realm of Financial Planning. What is Your Goals of Financial Planning?

The Different Realm of Financial Planning

Single Transaction. From the perspective of the individual client, financial planning could mean nothing more than locating the least expensive credit card, or finding the best way to save for a child's college education. From the perspective of the "financial planner," it could be the advice given by an investment adviser or stockbroker on what stocks the client should purchase, or the ledgers provided by a life insurance agent comparing the relative advantages and disadvantages of purchasing term or permanent life insurance. The difficulty here is that the process tends to be focused on doing, but short on planning.

Source And Depth Of Advice. It could also be argued that financial planning does not begin until the individual client consults with his investment adviser, insurance agent, tax attorney, CPA, or other such advisor, on more in-depth matters relating to either investment, insurance, or tax planning. Again, the difficulty here is that the process may be appropriately in-depth, but is narrow in scope and fails to consider all aspects of the client's financial situation.

Comprehensive Planning. And finally, there is the comprehensive must-do-it-all approach to financial planning. Clearly, this approach takes the high ground in maintaining that true financial planning involves a coordinated process of gathering facts relating to all areas of the client's financial affairs, determining the client's overall financial goals and objectives, and designing and implementing plans and strategies for attaining these goals. Although individuals involved in the financial planning process come from diverse backgrounds, the focus should not be so much on who is working with the client, but rather on assuring that the client receives comprehensive and in-depth advice that is implemented in coordination with the client's overall financial situation.

The financial planning process is important, not only in creating a "financial road map," but also in creating a better awareness of the short and long-term consequences of every-day financial and consumption decisions. Once armed with this knowledge, financial planning will become a day-to-day exercise, not just a once every few years or a once in a lifetime event.

It has been said that financial planning involves risk management; the risks of dying too soon, becoming disabled, and living too long. While this is certainly true, some of the following goals clearly fall outside of the concept of risk management, yet are important elements in many financial plans.
1.    Improve current standard of living.
2.    Protect property from loss and damage.
3.    Protect family from large medical expenses.
4.    Reduce or eliminate debt, particularly high-interest credit card debt.
5.    Provide for ongoing income in case of disability.
6.    Create an emergency fund.
7.    Increase net worth through savings and investments.
8.    Minimize income taxes.
9.    Accumulate funds for specific large investments, such as weddings, vacation homes, and extensive travels.
10.    Provide funds for child's education.
11.    Provide for a comfortable retirement.
12.    Protect family in case of premature death.
13.    Create an estate plan for disposition of assets at death.
14.    Pass business interest to surviving family members.


Saturday, April 3, 2010

The Essence of Leadership - How to make responsible choices. Great leaders create leaders, not followers.

I believe greed is the single biggest problem we face as a society today. It is at the root of so many of the problems—from a broken political system, to a dysfunctional family structure, and everything in between. Greed has permeated organizations from youth sports teams to Fortune 100 companies. CEOs and politicians have been sentenced to prison, professional athletes are more juiced than Florida, and youth sports coaches and parents have twisted Vince Lombardi’s pep talks into an impossible standard for the players.

How do we, either individually or collectively, avoid the trap of compromising our core values when pursuing our goals? The answer, of course, is by focusing on behavior.

One of the many fallouts of any top-down-driven organization is the “I say, you do” approach to expectations. When that approach is applied, it influences everything the company does. Far too often, this mindset leads to organizational failure.
Athletic teams are judged by their wins and losses as obvious indicators of success or failure. Business organizations are benchmarked by profitability and are often victims of a lack of commitment to their own standards of excellence. One might argue that financial considerations define the end game.
The bigger issue is understanding how this lack of commitment to a standard of excellence does not compromise your core values. Where does it come from, who owns it, and is it doable?

The obsession with winning at all costs and personal greed puts so much strain on organizations for quarterly earnings that Wall Street has become the ultimate decision maker on what is acceptable performance. Frankly, Wall Street doesn’t care about anything except profits. You need to safeguard your people and your organization by making certain everyone is focused on behaviors that reflect the standards of excellence.

There is plenty of effort put toward the strategic planning process, financial modeling, and objective setting. Far too often, an organization’s goal is a top-down-driven number that is arrived at by financial analysts charged with growing the stock price and, eventually, management compensation.

During my visit to Texas, Vince and Charley taught me about “ownership.” They said if people own a little bit of the action and if they have some skin in the game, they treat the standards of excellence much differently. These standards now become their goal, their objective, their opportunity, and ultimately their victory. That simple piece of advice led me to the conclusion that great leaders create leaders, not followers.
The deeper you can drive leadership into an organization, the greater the chance you’ll be successful. Leadership is more than a title or a designation.

We must displace the belief that leadership is the unwanted burden of the self-serving, dishonest, power-hungry elite we described earlier, and replace it with an inspired acceptance that the gift of leadership is our most basic birthright.
The essence of leadership is about making responsible choices.
Leadership belongs to all of us.

Over time, I began to realize that it was virtually impossible to expect people to accept the responsibility of leadership unless their environment encouraged and acknowledged their efforts. I struggled with how to communicate this much-needed sense of ownership (leadership) among our employees. I questioned what role leaders should play in creating an environment where employees take responsibility for success and failure, not only for their respective work groups, but more importantly, for themselves and each other.

Leaders need to be more like a teacher than a boss. Leaders have to help employees confront difficult questions, issues, and challenges as they seek the right answers. By focusing on behavior, leaders create an environment in which candidness, courage, and caring about the company become every employee’s responsibility. As leaders, we must help our employees find within themselves the courage and clarity to lead others. This is central to organizational success.
Ultimately, we realized creating that ideal environment had to start with us. It had to be demonstrated by our leadership team before we could expect the rest of the organization to do the same.


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