To: Bob Broline
From: Kimberly Smith
Date: December 6, 2013
Subject:

After carefully reviewing the problems you are having with your business organization. I have come to the conclusion that that the best option for you and your company is for you to form your company into a Limited Liability Company. I am confident that after I share with you the reason for this change. You will also agree with me that a limited liability will be a good option for both you and your business.
Mr.Broline, you are currently operating your business, Broline Woodworks, as a Sole proprietorship. I have talked about that you have liked the advantages of being a sole proprietor because you have the control over the business, all the profits are yours alone, and you only have to file a personal income tax. These advantages are all good parts of sole proprietorship. The Problem for you is the disadvantages of sole proprietorship, which your biggest concerns is personal liability. As a sole proprietor you are personally responsible for all liabilities. This means any judgments against your business; creditors can go after your personal assets. For these reasons I believe you should you and your business would be best severed if you formed into a Limited liability company. The most important reason you may want to consider a limited liability company is that it will protect your personal assets from creditors and legal judgments. Another aspect of a limited liability company is you will have a board of directors. I know that you like to have personal control of your business, but with a limited liability company your board can be your family members or whoever you would like to be on the board. Another advantage is you are anyone on your board may lead money to your company and receive interest on your money.
There is a couple of other reason that makes a LLC a good choice for you. One is expansion of your business. LLC that are registered in one state can generally operate in other states. You may also like the taxation accepts, with the LLC you and the members of your board do not have to pay self employment tax on the profits. The LLC is subject to a pass through taxation-which means companies do not pay income taxes. The taxes however are paid by the members as their personal income tax. There are a few disadvantages to a LLC such as the longevity of the company is still determined by you as the major stock holder. If you were to die or leave the company the LLC would be dissolved. I feel that the Advantages of A LLC out weight any disadvantages. The protection of any personal liability alone is a very good reason to conceder forming into a limited liability company.
I hope you will give all this information great consideration. After you review ever thing lets meet together to discuss your thoughts and go over any questions you might have. Best Regards, Kimberly Smith