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Lit1

In: Business and Management

Submitted By Vaughn
Words 682
Pages 3
To: Business “X”
From: Support Company “Y”
Date: August 1, 2013
Re: Business “X” questions pertaining to a Limited Liability Company

Business “X”, your questions and concerns are of the highest value to us. We hope to provide you with the best possible service in your quest to making Business “X” a profitable and customer friendly decision for all parties concerned.
In your acquisition to seek the Limited Liability Company(LLC) or to remain in a sole proprietorship for Business “X”. I wanted to provide you with some information that may assist in your decision. As a sole proprietor your business and self are one in the same and you would fall into the same tax bracket as any other individual during the taxation season. There is no distinction between you and Business “X”, which would make you personally liable for all transactions and debts that may occur from within the business. Many individuals like yourself chose to forgo the LLC option, this gives yourself limited liability to include tax options not allowed in your current situation. Business “X” would now have the option to add additional members or continue to run the business as it is today. As a LLC, you would have the option of “passing through” income to the members allowing them to file individual tax. Business “X” would become a distinct legal entity, having its own identification number and bank account. Filing for the Limited Liability Company (LLC) is a simple process, you would file the required documentation through the state (Articles of Corporation). You could recruit many members, which would give you the capital to grow Business “X” into a larger entity. This does come with some disadvantages also, i.e. Limited Life and Self-Employment Taxes. The business may be dissolved if a member leaves the LCC, however you can create provisions in the operating agreement to continue the business by replacing the member and continuing the LLC. As stated above, members are considered self-employed and would be required to file individual income tax during taxation.
Key points (to include advantages and disadvantages):
Chose a business name (Business “X”) – the addition of “LLC” would be required.
File the Articles of Organization – within the state, check with your Secretary of the State for your state’s specific offices and forms.
Create an Operating Agreement – in the case you bring members into Business “X” an operating agreement can protect your investment, it includes percentage of interests, allocation of profits and losses, member's rights and responsibilities and other provisions.
Obtain Licenses and Permits – once a LLC, you will need to gain the proper licenses and permits for your state
Announce Your Business – announce your business in the local newspapers (required in some states)

In closing, I would recommend the Limited Liability Company(LLC) in your situation. The allowances would greatly benefit yourself and Business “X”. Members of Business “X” would have the choice of “passing through” taxation, meaning the profits could be pass along to the members and filed separately during taxation. One of the more important aspects of a Limited Liability Company is bankruptcy, if Business “X” was required to file bankruptcy, the business and not the members would file, protecting your members from losing addition money and being required to pay off any debts that occurred during the life of the business. At a time you chose to incorporate Business “X”, this would be a simple process that our firm would be proud to represent.

For any other questions, please email or contact us at 123-456-6789.
Thank you and we look forward to assisting you in your business process.
Regards,
Support

Works Cited:
(IRS), I. R. (2013). Retrieved from irs.gov: http://www.irs.gov/pub/irs-tege/llc_guide_sheet_instructions.pdf
(IRS), n. R. (2013, July 29). Small-Businesses-&-Self-Employed. Retrieved from irs.gov: http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Limited-Liability-Company-%28LLC%29
Administration, U. S. (n.d.). Choose Your Business Structure. (C. Y. Structure, Editor) Retrieved from sba.gov: http://www.sba.gov/content/limited-liability-company-llc

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