College of Banking & Financial Studies Taxation Theory Questions Discussion I need correction for theory The picture attached with comment For any clarific

College of Banking & Financial Studies Taxation Theory Questions Discussion I need correction for theory The picture attached with comment For any clarification please ask Introduction
Tax liability is the amount of money you owe to tax authorities in a country or state. Business
organization differs with their tax liabilities, corporation pays lower taxes than individuals,
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unincorporated business can claim personal tax credit which is not the case with incorporated, who
in turn can defer taxes to a later date.
explain unincorporated orgainisation, then
explain, it is divided into sole trader and
Unincorporated organization partnership, then explain sole trader and
business
partnership in detail
An unincorporated organization is a company that is established through agreement
.
between a set of individuals who join intending to make profits.
Sole proprietor is a person who manages and owns an entity fully on his own, he/she is not
a legal person or entity (Van Tulder et al., 2016)] He isdiebte in paying all the taxes both
for the business and his personal income as one.
Partnership is a
is a legally recognized business that is operated by two or more people sharing
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profits, losses and management (Kumar, 2018). There are basically two types of
.
partnerships, general and limited.
Advantages of unincorporated organization
4 One can easily set up the organizations since (Weygandt, Kimmel & Kieso, 2015), they
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require a mere agreement between members and they start.
2. There are low compliance costs charged on them.
3. The organizations are not obliged to file accounts like all the other companies.
Disadvantages of unincorporated organization
Incorporated organizations
haracteristics of the Incorporation
ation of is the legal procedure followed when forming a company that is separate
from the assets (Chebii, Bwisa & Sakwa, 2016), taxes and income of its investors and
shareholders.
a. The company has a reduced tax rate compared to that of an individual income.
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b. It has increased leniency in tax restrictions when there is loss carry forwards.
c. A company can raise capital by selling stock considering that they can sell shares to the
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members without restrictions.
The owners and shareholders of the incorporation are protected against its liabilities. This
is especially in occurrence of losses or bankruptcy of the company.
Types of companies: Private and Public and their characteristics
A private company is an entity owned privately where it can issue stocks while having
shareholders but cannot participate in exchange of public shares. They do operate under
securities exchange commission’s making their shares to be of reduced liquidity.
a. The company is limited from transferring its shares freely to the public due to restricted
share transfer
b. They enjoy some privileges and exemptions because of the free share transfer restrictions
in comparison to the public companies.
c. There is a minimum capital requirement when starting the company.
• A public company is an organization that has an ease transfer of shares which is owned by
a minimum of seven people a limitless number
a. The company has a limited liability where every member’s liability is limited by having no
risks of their personal assets in case of a loss
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b. The company is started by a minimum of seven members and no defined maximum number
of members
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c. The company has perpetual association hence in case of insolvent (Holcombe, 1998).
bankrupt or a dead member, the company’s existence is not limited and its life is forever.
Difference
between Private and Public company
Private companies prepare financial statements to report their revenue for taxation do not
require complex financial statements according to GAAP (Ko, 2016). Public companies
please add few more differences between private and public
company
the above statment shows that you have not understood the basic taxation computation. you have deducted
corporation tax, etc.
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Conclusion
To crown it all, the computation of taxes of both incorporated and unincorporated organization
follows the same approach. The difference between the two is the mode of their management where
in incorporated organization the line
investors and the promoters are separated from its liabilities while
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the other forms of incorporation, this is not the case. However, taxation concept in organization is
very crucial and the only biggest form of government revenue, the money collected by the
government is used in provision of public services and promotion of social amenities. This is the
explanation that taxes have a good side of it even if the businessperson succumbs to its effect.
your assignment is not up to standard, even the calculation is not proper, you have to follow the format while calculating
the income in case of unincorporated orgnisation and company.
Explore and explain the implications of taxation liabilities for un incorporated organisations Explain the meaning of
unincorporated organisation, sole trader, Partnership. Advantages and disadvantages of unincorporated organisation
(Concentrate on tax point) Apply recognised models and formulae to interpret data appropriately to calculate and
determine taxation liabilities for un incorporated organisations in case of Individual: Calculate Employment Income,
Calculate Trading Profit, prepare Computation (3 columns), calculate Tax Liability. Give clear workings and special
notes wherever required. Explore and explain taxation liabilities for both private and public companies: Explain the
meaning and characteristics of the Incorporation (company). Advantages and disadvantages of Incorporation. Explain
the types of company (Private and public) – its characteristics. Difference between Private and public company. (give
importance from taxation point of view) Apply recognised models and formulae to interpret data and detemine taxation
liabilities, including late payment interest penalties, for incorporated organisations. For the same question, Calculate the
trading profit of the company. Prepare TTP of the Company. Calculate Corporation Tax. For highest grade: Investigate
taxation liabilities and use appropriate application models and fomulae to interpret and analyse data correctly You have
to interpret the calculation of tax liability in case of Individual (calculated in M2) and the corporation Tax (calculated in
M3). Also, give your advice from the taxation point of view. It is based on you, how you will substantiate.

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