Lit1 Task 310.1.2 Memorandum

Being called upon to view the business operations and logistics of the current sole proprietor owned operating business entity, it seems as though a change is being needed within the company’s business structure. Since the company’s strategy and goals are changing with the progression of profits and direction of company needs, I have come to a conclusion on the best change the company can undergo to become even more successful and raise profits even greater than already doing so. My recommended change to the company’s entity is to create a Limited Liability Company to handle any future business needs. Some minor disadvantages will accompany the formation of this new business structure but the change will entail a number of benefits to the owner.

The benefits the owner can take advantage of in this newly formed LLC will be found within the newly formed Articles of Organization. In this document, the transfer of interests within members will be reflected to ensure control over the company be left with whatever members the owner feels is the best fit to continue within the company should the current owner retire or passes suddenly.

Personal liability concerns that are due to employees of the company becoming injured on the job or that should happen to injure others while on the job shall be reduced or removed since the members of the LLC shall not be held liable for employee mishaps while on the job. Though the LLC as a whole may experience some liability risks, the members shall be sheltered against personal liability to these circumstances and any personal assets held by them will be safeguarded against any legal suits filed against the LLC.

With regards to the taxation of the LLC, it will be the same as that of a partnership and the company will be free of double taxation headaches which are found in corporation entities. The lowered taxation status will boost the salary of the LLC members. The tax situation of the LLC shall stay this way unless the LLC is...