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Submitted By GenisisX
Words 303
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To: Business Owner

From: Jared Williams, Executive Assistant to the President

Date: October 31, 2014

Re: Potential Business Model Recommendation

I have completed my review the information regarding your company and considered the pros and cons of the available models. It is my recommendation that you convert your Sole Proprietorship into a Limited Liability Company.

LLC Details

A limited liability company is a relatively new business model that combines the protection of a corporation with the tax treatment of a partnership. This model grants owners the flexibility to be taxed in the same way as a partnership or a corporation. It allows for the business to be owned and run by one or more individuals called “members”. These members can be partners, investors or family members. This business model can be managed by its members, similar to a partnership, or by appointed managers like a corporation. Since a limited liability company is its own legal entity, members are better protected from liability and loss than they would be in a sole proprietorship or partnership. This business model can also easily evolve into a corporation as the business continues to grow. However, this business model does not allow owners to sell shares to the public sector, usually require the payment of annual fees. There are also some state restrictions as to which industries are allowed to operate as limited liability corporations.

Advantages to you

* Does not require the rigid formalities of a corporation. * Owners are protected from personal liability. * More flexibly taxed than other models. * Family members can be “members” within the business structure.

Disadvantages and potential risks

* Not appropriate for businesses seeking to sell shares to the public sector. * More expensive to maintain than sole proprietorships or

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