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Business Structure Advise

In: Business and Management

Submitted By nicole10711
Words 821
Pages 4
Devin Constant
FIN/571
Business Structure Advice
March 9, 2015
Clifford Merchant

Dear John Owner,

Congratulations on starting your own business. Since you are unsure of where to start let me provide some useful information that will allow you to choose the best option for your new business. You have started off in the right direction by researching your business plan. You must really plan strategically to ensure the longevity of your business and its ultimate success. First, you must get the base of your business plan down by determining your goals and objectives. Let’s cover the first steps which will cover what type of ownership/ structure you would like to have along with finances.

There are some options for you to look into, Sole Proprietorship, which is the most basic type of business to establish, you and you alone own the business and are entitled to all assets and liabilities. Advantages to having Sole Proprietorship is that it is the least expensive when starting up along with the easiest form of a business structure. You will have complete control over all decisions made when regarding your business. Disadvantages to Sole Proprietorship is that if you are unsuccessful you can be held personally responsible for all debt that you incur. Also, you are unable to sell company stock, this can make it difficult in the long run when trying to obtain investors to invest in your business. Forewarning, banks often do not like giving large loans to Sole Proprietors due to the fact that if failure does occur repayment can be difficult for the individuals and they become a high risk. Now the upside to being solely in control of your business is when taxes do come around you and your business are considered the same, therefor you will not get taxed on your business because the income is your income obtained throughout the fiscal year.

Limited Liability Company

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