Discuss the below in detail:
Q: Quality Cleaning Services is a business owned by three persons. In each of the following situations, determine whether
Quality Cleaning Services is a sole proprietorship, a general partnership, a limited partnership, a limited liability company, or a corporation.
Quality Cleaning Services defaults on a payment to a supplier, Johnson Chemical. Each of the three owners is personally liable for payment of the debt. Quality Cleaning Services raises $200,000 through the sale of shares of its stock.
At tax time, Quality Cleaning Services files a tax return with the IRS and pays taxes on the firm's net profits, and Quality's shareholders (owners) each pay personal income tax on dividends received from Quality.
Two of Quality's owners are not allowed to participate in the firm's management, while the third owner manages the business and assumes liability for all of Quality's debts.
Quality was created informally, by an unwritten agreement among the three owners.
At tax time, Quality can choose whether to be taxed as a corporation or as a partnership.