...Business Structure Advice FIN/571 December 8, 2014 Prof. Hillman Lo Business Structure Advice Date: December 8, 2014 To: John Owner, President RE: Business Structure Advice Dear Mr. Owner: In response to your request, there are four business structure options to choose from when starting a business. These structures consist of sole proprietorship, partnership, corporation, and limited liability company (LLC). To assist you in selecting the best structure for your business, I would like to discuss the benefits and drawbacks, as well as legal and tax implications of each structure. Sole Proprietorship A sole proprietorship is owned and operated by a single owner. It is the easiest, most inexpensive, and least regulated structure to organize. The owner receives all the profits and has full business authority (Parrino, Kidwell, & Bates, 2012). On the downside, the sole proprietor has unlimited personal liability, and the source of capital is restricted to the owner’s personal funds including the loan the owner can acquire. For tax implications, the sole proprietor benefits from flow-through taxation wherein the earnings and losses of the company are filed through the proprietor’s individual tax returns (Cheeseman, 2013). Partnership A partnership is a structure formed by two or more co-owners. General partnership enjoys the same benefits and drawbacks as a sole proprietorship. The principal advantage of a partnership is that it has more access...
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...Business Structure Advice FIN/571 October 20, 2014 Richard Vermeer Business Structure Advice The purpose of this paper is to respond to an email from John Owner who is seeking advice on his options regarding all the possible types of business entities that there are for him to choose from to form his new business. In addition, Mr. Owner would like to know the advantages and disadvantages of each entity and the tax consequences connected with each entity. The business structures that will be discussed with Mr. Owner will include sole proprietorship, partnerships which include general partnerships and limited liability partnerships and corporations which include subchapter or S corporations and limited liability corporations. Sole Proprietorship A sole proprietorship is the simplest structure and the most inexpensive business to start. The owner has complete control over the business and has the sole rights to the business profits. The owner is responsible for making all business decisions and does not have to defer to partners for decision approvals (Parrino, Kidwell, & Bates, 2012). The life entity of a sole proprietorship is limited (Parrino et al, 2012, p. 572). An advantage of a sole proprietorship is that the profits earned are subjected to lower income taxes (Parrino et al, 2012 p. 572). One of the major disadvantages of a sole proprietorship is that the owner is liable for all business debts. The issue with unlimited liability is that creditors review...
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...Business Structure Advice Dear John Owner, Starting a business is a very big decision and will be one of the most challenging adventures that you will participate in. You emailed me asking for my advice concerning business structures and how to proceed given your newly devised business plan. I have attached a table that I created that gives you the information you are looking for. The table contains the business structures that are most common, a brief overview of the structures, advantages, disadvantages, and possible tax implications of each business structure. I have put this information in table form with bullet points so that it is easy to understand. I believe that the information that I have given you will better help you make that important decision regarding the business structure of your company. Please look over the information below and consider all of your options carefully. There is no right or wrong answer when it comes to choosing a business structure. The right structure is the one that works best with your business plan and needs. If you have any questions regarding the information, please feel free to contact me anytime. Respectfully, Nichole Coates, Consultant Business Structure Type Overview of Structure Advantages Disadvantages Tax Consequence of Business Structure Sole Proprietorship • 75% of businesses make up this type of structure • One owner and small number of employees • Simple to start • Least regulated • Owner...
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...September 30, 2014 To: John Owner Re: Business Structure Advice I appreciate you contacting me in regards to forming your business. There are several factors to consider when forming a business and determining how it will be financed. I will list a few options below along with information that will help you in your decision making process; this information will include the advantages and disadvantages of each, and possible tax consequences for each scenario. Choosing a business to be a sole proprietorship can be a great option if you are seeking simplicity. Being a simple structure means easier to manage, such as doing taxes, paperwork, and the overall startup of the business. Being able to have a legitimate business is done with a few simple steps when creating a sole proprietorship; these steps include getting a DBA (Doing Business As) and getting any proper licenses that the state requires. With the simplicity of this structure it means less paperwork all together as well as less hassle when filing taxes. This business structure makes it so you wouldn’t have to file your business separate from your personal taxes. This decreases the time and effort it takes when filling taxes. A con of sole proprietorships is that your personal assets are up for stake if something were to happen to your business. If your business was to be sued or creditors came after the business there is nothing to protect assets not related to the business. Another drawback is that it is not possible...
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...Business Structure Advice Sandra Martinez FIN/571 October 8, 2015 Mike Flores Business Structure Advice Business Structure Advice FIN/571 October 8, 2015 From: Sandra Martinez To: John, Owner Subject: Advice in starting your business John, in response to your request, for business structure advice, I believe the following business advice will be extremely helpful to lead you to the best decision. I would advice to develop steps to a business plan. First, write out a business plan. The business plan is to structure a successful business, which will outline and define the goals and guidelines of how to accomplish and structure those goals. A business plan also will help to assist owners with organizing thoughts, developing career ideas and how to lead a business. First and foremost, you must know which business structure and option there are; these options will include sole proprietorship, partnership and corporation. A partnership could be general limited, associated with two or more people as business partners and a corporation could be general or a subchapter S-Corporation. Each of these structures has their advantages and disadvantages and differences in tax consequences. I strongly suggest you review and choose the efficient and effectiveness that best fits your business structure or service needs. The following will include different types of business structures. A sole proprietorship is the best structure for those business owners starting...
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...FIN 571 WEEK 2 A+ Graded Tutorial Available At: http://hwsoloutions.com/?product=fin-571-week-2 Visit Our website: http://hwsoloutions.com/ Product Description PRODUCT DESCRIPTION FIN 571 Week 2 Business Structure Advice Mr. J. Q. Customer, it is a pleasure doing business with you. I have researched your concerns and found several options that are viable for you and the startup of your company. I hope you will find the following information helpful in making your decision regarding the structure of your business. We will be next to you all the time from creating a plan to advise your company how to form a business, the crucial financial choices, and finalize legal actions. Deciding which business structure is the best for organization can be difficult if you are unsure of what the type and which best is suited for your business purpose. Each of them has different legal and tax implications. The following are the business structures that you should consider. As always I am available to discuss any of these options and am looking forward to further discussions with you. Sole Proprietorship The first option is that of sole proprietorship. This option is the simplest business structure available. It is the least regulated form of business and with the lowest income taxes than most of the corporations (Parrino, Kidwell, & Bates, 2012). The business will be operated by yourself so that you will be in charge of the business from business liabilities, debts, and losses...
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...A++PAPER;http://www.homeworkproviders.com/shop/fin-571-week-2/ FIN 571 WEEK 2 Fin 571 Week 2 Practice Quiz 100/100 Week 2: Business Structures FYI: Below is an email received from one of our customers. Please use the information contained within the email as the guide for updating the week one repository. Write an 850 to 1,000 word response to the following e-mail: I am currently starting a business and developing my business plan. I’m in need of some advice on how to start forming my business. I am not sure exactly how it will be financed and whether or not I want to take on partners. I am interested and willing to learn the intricacies of my options to determine how to best proceed with my plan. Please advise on what my options are, the advantages and disadvantages of each, and possible tax consequences for each scenario? Respectfully, Q. Customer Citation Requirements Include only peer-reviewed scholarly references from the UOP Library. Additional valid references include course assigned textbooks, simulation materials, or materials from the researched companies. Do not reference information from non-course related web resources, or from textbooks not assigned to the course. Request permission to use non-course related references from the instructor to avoid citation-based penalties. The expectation for assignments is that the student increases their application-based understanding of course materials. Understanding, in this case, means...
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...Business Structure Advice Michael Haney University of Phoenix Foundations of Finance FIN/571 Alexandro Plascencia May 22, 2015 Dear Consultant, I am currently starting a business and developing my business plan. I'm in need of some advice on how to start forming my business. I am not sure exactly how financing occurs and whether or not I want to take on partners. I am interested and willing to learn the intricacies of my options to determine how to proceed best with my plan. Please provide advice on my options, the advantages and disadvantages of each, and possible tax consequences for each scenario? Dear Mr. Owner, I appreciate the opportunity for your inquiry regarding my advice about you developing and implementing a business program. I am providing you with advice concerning various business structure possibilities, advantages and disadvantages for each business system, and other tax implications regarding each business structure. Sole Proprietorship Structure: (Option 1). Your email suggested your unfamiliarity with operating a business or owning a business. This system provides you with the freedom to operate a flexible operation. Some of the advantages include: -Controlling the decision-making process for your business. -Transferring or selling the company at your discretion. -Sole proprietorships face no corporate taxes. -Operation costs remain minimal during the business development process. Sole Proprietorships are not isolated entities...
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...Week 2: Business Structure Advice Holly Harris April 12, 2016 FIN/571 Instructor Jim Ciaramella Dear John Owner, Thank you for contacting me for help. I would be happy to provide some advice on how to form your business. I’m glad to hear you are developing a business plan. Writing a business plan really forces you to review every aspect of your business and its entirety. I know you’re not sure how you will be financed but if you ever plan to get a business loan a financial institution will require a business plan as it communicates your business ideas to others and provides the basis for a financial proposal. Keep in mind there is no exact formula for putting a business plan together; however, specific sections should be included. Below I have outlined the sections needed for a business plan. * Summary: This is an overview of your business plan. * General Description: This is where you would explain the type of business you have. It would be important to explain why the business is needed and the chances for success. * Products and Services: In this section you will describe the products an or services your business will provide. * Marketing: Identify your target market. Outline how you will market to customers and what demographic you are trying to reach. * Management: This is the section you will describe your skills and experiences as an owner and entrepreneur. If you plan on having employees, identify them as well. * Finances: State...
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...Business Advice !1 Business Advice Business Advice Mr. Owner, you are off to an excellent start. It is pivotal for business owners to compare options to discover which business structure would be most suitable for their needs. Because you are undecided how to finance and whether you will have partners, I compiled a list of the advantages and disadvantages of each business structure for your review. Sole Proprietorship If you decide that you want full control of the business, a sole proprietorship could be the best option. In this structure, you would be the decision maker; therefore, the way in which your business operates will be up to you. Additionally, since you are undecided about financing, you will be pleased to discover that a sole proprietorship is the least expensive option and has a very simple formation process (“Corporate Business Structures”, 2011). In reference to your question about taxes, a sole proprietorship does not have any specific business taxes; instead, as the own- er, you would pay taxes on your income as part of your personal income tax payments (“Advan- tages and Disadvantages of Sole Proprietorships”, 2007). Before you decide upon a sole propri- etorship, you should be aware of the negative aspects. Because there is no liability protection, you would be held personally liable for the business’s debts and any liabilities that result from your employee’s actions (“Advantages and Disadvantages of Sole Proprietorships”, 2007). Ad- ditionally, the...
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...BUSINESS STRUCTURE ADVICE Tyanieka Jackson FIN 571 November 3, 2014 Zhenhu Jin BUSINESS STRUCTURE ADVICE Thanks so much for the opportunity to provide consultation on how to proceed with starting your new business. There are certain advantages and disadvantages to choosing a particular business structure over another. This document will be providing options and feedback on each so that you can make the best decision possible. If you plan on running your business as an individual, there are a couple of options to consider. Running a business as a single owner provides a means of having total control of the decision making, daily operations, and the profits. The other side to this is that all financial burdens fall on the single owner and they have unlimited liability in terms of potential judgments and debts that may arise. There exist the potential for debt collectors to lay claim to an owner’s personal property in order to satisfy a financial judgment. The other option available to a single business owner is the Limited Liability Company (LLC). It has all of the advantages of the sole proprietorship with the added advantage of the owner having limited liability. If you are considering taking on partners with the new business, the structures to consider may be the general partnership, which has basically the same advantages of the sole proprietorship or again the Limited Liability company described above. The LLC allows for both single and multiple owners...
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...Business Structure Advice FIN/571 April 11, 2015 Dear John Owner, Congratulations on your decision to start a business. It is definitely a smart idea to be aware and analyze the different business structures, their tax implications, and where the investments come from. You do have several options to choose from, and each of them have both advantages and disadvantages. Some of your options include several types of corporations, partnerships, and sole-proprietorship. The first possible business structure is one of the types of corporations. The General Corporation is the most common type of corporate structure. The characteristics of a general corporations include being a separate legal entity, owned by stockholders (an unlimited number), that are protected from business creditors. One option is a type S Corporation, which is actually a type of General Corporation that has a special IRS tax status. It is popular with small businesses because they are charged as if they are sole proprietors, as well as combining tax advantages of a sole proprietorship with that of a corporation. Depending on the type of business you plan on starting, this may be an option for you. An advantage of the corporation is that the individual’s personal assets are protected. A disadvantage is that you have to share the profits with all of the stockholders. Another type of business structure that you could form is a Limited Liability Company, or LLC. There are fewer restrictions and...
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...Business Structures Paper Vineta Byrd FIN/571 July 23, 2013 Professor John Dewey Business Structures Paper Various business structures are available to entrepreneurs. Each of the structures have advantages and disadvantages. Therefore, individuals interested in starting a new business should be well informed on the different options available. First, one of the most common business structures are corporations. Corporations are complex and normally require professional assistance from an attorney. However, corporations allow the owners to protect personal assets from business obligations. Corporations are separate legal entities that are owned by stockholders. A corporation can have unlimited number of stockholders which makes it easier to raise capital, (Planning your business: Research, goals, and business plans (2011). Second, another available business structure is a Subchapter S Corporation (S Corporations). This structure is mostly used by small businesses. The advantages are tax savings, business expense credits, and independent life for owners. The Subchapter S Corporation allows the owners to have limited liability, but also function as a partnership or sole proprietorship. Another advantage is shareholders can easily leave the company without drastically affecting the business. The disadvantages are stricter operational processes and shareholder compensation requirements, (Planning your business: Research, goals, and business plans (2011). ...
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...Business Structure Advice Jennifer Yacovazzi FIN/571 May, 12, 2014 William Stokes Business Structure Advice In beginning a business people will start one for a variety of intensions. Some people think they have a merchandise or service that will transform a business or make them wealthy. Others might live in an area where there is no job openings, and starting a business is the only way to earn a living. Other people simply want to be their own boss. Whether any of these reasons can help a person to decide to start a business. We will discuss the organizational forms of business, advantages and disadvantages of each, and possible tax consequences for each business structure. Some of the more common basic forms of business organizations are a sole proprietorship, partnership and corporation. A sole proprietorship is the least expensive business to start. “To start a sole proprietorship, all you have to do is to obtain a business license required by the local and state governments” (Parrion, Kidwell, & Bates, 2012). A limited partnership can be more costly to form because an attorney will need to be hired to write and uphold the partnership contract. The partnership agreement identifies the type of the association among the partners. “If a corporation is what you would like to start an attorney will need to be hired to write up documents to spell out things like how many stocks can be distributed, what voting rights the shareholders will have, and who the...
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...Business Structure Advice Michelyn Johnson FIN/571 July 7, 2014 William Mellett Business Structure Advice Many entrepreneurs will make the decision to start their own business and work for themselves. By doing this they must develop a business plan and decide on what business structure to use. Below is an email from an aspiring business owner asking for guidance on which way would be the best to start up and finance his business. Dear Consultant, I am currently starting a business and developing my business plan. I'm in need of some advice on how to start forming my business. I am not sure exactly how it will be financed and whether or not I want to take on partners. I am interested and willing to learn the intricacies of my options to determine how to best proceed with my plan. Please advise on what my options are, the advantages and disadvantages of each, and possible tax consequences for each scenario? Respectfully, John Owner The below response will explain to John Owner the different types of business structures there are, the advantages, disadvantages of each, as well as any tax perks or consequences. Business Structure Sole Proprietorship The simplest common structure of business is a sole proprietorship. This is “an unincorporated business owned and run by one individual with no distinction between the business and you, the owner” (The U.S. Small Business Administration, 2014). As long as you’re the only person that owns the business there is...
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