Financial

INCOME TAXES – As a sole proprietor all business income or losses must be reported as personal income tax. The business itself is not taxed separately.

Income Taxes: The owner of a Sole Proprietorship pays taxes in the earnings of the company as personal income.

* Taxes are paid through the corporation on a corporate tax return. It is separate from the owner’s income taxes, commonly referred to as shareholders. Shareholders also include income or losses on stocks sold or dividends earned on their yearly individual tax return.

• Liability: The owner has unlimited liability. When the business fails it is up to the owner to pay all the creditors off.

* The value of the stock may see an upward trend thus increasing the initial investor’s financial wealth

c. Smaller payments mean more time in debt. d. Your lower interest loans also get rolled into the deal so you end up with minimal savings.

Income taxes- All income generated through a sole proprietorship is taxed by the Internal Revenue Service. This is reported on the owner's personal tax return.

The bank-lending channel underpins the role of banks as financial intermediaries, as their business structure is designed to serve certain type of borrowers, being small to mid-sized enterprises and households, where the problem of asymmetric information emerge \citep{stiglitz81}. According to the theory,

What is a financial intermediary? A financial intermediary is an organization that raises money from investors and provides financing for individuals, companies and other organizations. Intermediaries are a stop on the road between savings and real investment. Mutual funds and pension funds are two important classes of intermediaries. A financial institution usually suggests a more complicated intermediary doing more than just pooling and investing savings. Banks and insurance companies are good examples.

Ch.1 financial intermediation results from economies of scale and the specialization of financial transactions. (banks, inv. companies [mutual & pension funds], insurance companies, credit unions, brokerage firms, investment banks). Inv. banks assist firms in raising capital, create the market for innovative new securities that meet the risk and return demand (CMOs, collateralized mortgage obligations – derivative security that separates the cash flows of a mortgage pool into different classes with different maturities and risks). risk and return are the most important characteristics of financial assets. Another is tax. (high tax-bracket investors would, other things equal, would prefer tax-exempt securities [municipal bonds]).

A financial intermediary, by definition, is responsible for the process of transferring money from economic agents with a surplus of funds to economic agents with a deficit of funds, and is known as financial intermediation. This is achieved by means of a financial security, such as stocks and bonds. The mechanism that allows the trade of such financial securities is known as a financial market. Financial markets aim to facilitate the raising of capital, as well as the transfer of risk between economic agents and also international trade. Typically, the borrower will issue a receipt, or financial security, to the lender that promises to pay back the capital gained. Securities such as these can be freely bought or sold within financial

In the most basic definitions of economics, the United States’s Financial system is broken down into approximately five groups: the households, the firms, the market for factors of production, the market of goods and services, and the government. Within these groups, there is a constant flow that progresses in a circle through all of these groups in order to keep the economy running smoothly. This system is based on the notion that both consumers and producers need to come together to transact. However, buyers don’t always have the money they need to buy supplies, and sellers don’t always have the money to produce products or provide services. When this occurs, it is important for both investors and banks to offer aid in order to prevent

deductions for ordinary and necessary business expenses and deductions for losses taken by owner personally to extent of other income (including spouse 's income if reported on joint return) and without any basis limitation

Taken as a whole, the money markets, stock markets, and OTC markets facilitate efficiency within the financial markets that ensures funds from savers are directed to their best sources. Not only does this help the US economy grow, but it also “facilitates the international flow of funds between countries” (“Please explain how financial markets,” 2005).

Agents (e.g. brokers). Carry out the instructions of lenders and have no rights to the benefits that flow from the acquisition of the instruments by the l d lenders. Asset transformers (e.g. banks, investment/finance companies). Involved as principals in the