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S-Corporation vs Llc

In: Business and Management

Submitted By Volaju
Words 1900
Pages 8
After a thorough amount of research, I find it best to simply to look at the root of the concerns. Here we have two gentlemen, from widely different backgrounds seeking to make a profit, albeit, in varying degrees in the market of laundry and dry cleaning. It is to my understanding that Mr. John Smith will be the source of capital in this joint business venture. Mr. Smith, a retired man, is concerned with protection from liability for the sake of his personal assets and belongings. Taxes are not a concern as long as they are paid and protection keeps him behind some form of veil. On the other end of the spectrum, we have the younger Mr. Juan Gonzalez. Mr. Gonzalez does not have much in the way of investments nor does he have any personal assets that would be much at risk. Mr. Gonzalez is more concerned about taxes and with obtaining as much profit as possible with no minimal attention to risk, understandably so. It’s best to take these drastic views and ideologies and reach some semblance of a compromise between both parties in terms of which business entity should be agreed upon. To commence, it would be best to eliminate superfluous options from the get go. Sole proprietorship is out of the question simply because of its inherent definition. A “partnership” will also not be considered, because although it offers several tax breaks and the potential to be more easily managed, it has an unlimited amount of liability risk. If for any reason there were ever a dispute and the business were to be sued, the pursuer of the suit will be able to directly aim for the personal assets of the business owners, not just the business. This ever looming cloud would be an unnecessary burden that both Mr. Smith and Mr. Gonzalez would not want to endure, one for the loss of their assets and the other for a loss of their profits. There exist two options that could be most

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