Busiess Structure

Business Structure Advice

April Jones

FIN 571

April 02, 2015

Professor Yvonne Downer

Business Structure Advice

Date: April 02, 2015

To: John Owner

RE: Business Structure Advice

Dear Mr. Owner,

Thank you for seeking my services regarding intricacies to start your new business. Establishing a business can be overwhelming and require a great deal of planning. Every segment within the market structure from the legal aspect of the strategies is highly significant (AB, 2015). The business entities chosen may reflect how the company will function, personal liabilities, finances, tax consequences and future corporate decisions.

In forming a business, you will have to determine which structures will best suit your company. The most common business structures used when starting a business is Sole Proprietorship, Partnership, Corporation, and Limited Liability Company (LLC) (AB, 2015). The advantages/ disadvantages of each business structure will be reviewed to determine the proper requirements and obligation.

Sole Proprietorship

Sole Proprietorship is the most common used structure. This structure is run with one owner, least expensive and require minimum fees. The advantage is the owner will have sole control over all business decisions, tax benefits and profits (AB, 2015).

Disadvantage

* Owner will automatically be accountable for all personal and business debts.

* Business function without liabilities protections of the corporate shield.

* When an owner assets are tied banks become averse to making loans.

Partnership

Company consists of two or more co-owners who agree to share the liabilities and responsibilities of the business (AB, 2015). In a company the facts to consider is what will each other invest in the company cash, energy, and responsibilities.

Advantages

* Easy to organize and liquefy

* More access to capital.

* Tax Benefits- share income deductions, tax credits, and can report the business profits on individual...