tp0d
yabbazooie
Premium
join:2001-02-13
Carnegie, PA
clubs:
 ·Verizon FIOS
edit:
July 20th, @09:04PM
| reply to captain456
Re: shareholders
said by captain456 :said by tp0d  :How does no profit == work for free? Are you serious? lets keep this simple. You open a business. You are making $100 per month worth of sales and your monthly expenses are exactly $100. You break even. You keep doing this month after month breaking even. You are basically working for free. Why is that hard to comprehend? And if you think it isn't the same when It is an evil corporation or someone else then you clearely don't understand the most basic high school level economics/finance/money/how the world works You're using the wrong definition of 'break even'. Monthly expenses of keeping a business running -include- employees. The president of a 1-man business is -still- an employee. Even a non-profit has to have a payroll, but theyre not allowed to turn a profit. If a business can't be run without its employee or employees making a decent living, much less any profit, its not worth it.
Since when does the president of an LLC (single member even) not pull a paycheck? The article mentions an LLC, not a fullblown corp.
Yes I understand economics, I think you are lacking in some of the principals tho..
-j
--
if it aint broke, tweak it!!
currently on FiOS (kick aZZ!) |
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pooker314
join:2005-04-12
Brush Prairie, WA
| Non-profits have "profits" very frequently. If they didn't, they typically wouldn't survive. However, that profit (usually called "operating margin" to avoid confusion), cannot be distributed to the corporation's members (sort of like shareholders). Instead, the money must be used for tax exempt purposes. This usually involves plowing it back into the business somehow (including capital development, higher salaries, etc.).
In the for-profit world, certain smaller corporations (s corps) can get into very big trouble with the IRS if they retain all of their profits for shareholder distributions in lieu of paying their owner/employees a reasonable salary (because shareholder distributions can avoid employment taxes like FICA/FUTA). |
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captain456
@gci.com
| reply to tp0d
Since when does the president of an LLC (single member even) not pull a paycheck? The article mentions an LLC, not a fullblown corp.
That would be called a shareholder. Which then yes they can receive a paycheck. The whole point of this is the origanal poster said something along the lines of if there are no shareholders then there doesn't need to be profit. So let me repeat this simple fact. If there are no shareholders than you cannot apy yourself with a paycheck, that would be illegal. Therefore you would be working for free. |
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