Fin/571 Business Structure Advice

In: Business and Management

Submitted By nlcoates
Words 489
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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 makes all decisions
• Owner keeps all profits • Owner responsible to pay all bills
• Owner has unlimited liability
• Equity of business is tied to owner’s personal wealth
• Ownership is difficult to transfer
• Difficult to raise money for business Sole proprietorships are subject to lower income taxes than other types of structure.

Partnership • Two or more owners that are legally…...

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