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Fin 571-Business Structure Advise

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Business Structures Advice Letter

FIN/571

July 21, 2014

John Kushner

Business Structure: Asking for Advice

Dear Consultant,

I am currently starting a business and developing my business plan. I'm in need of some advice on how to start forming my business. I am not sure exactly how it will be financed and whether or not I want to take on partners. I am interested and willing to learn the intricacies of my options to determine how to best proceed with my plan.
Please advise on what my options are, the advantages and disadvantages of each, and possible tax consequences for each scenario?
Respectfully,
John Owner
Business Structure: Advice Letter

July 21, 2014

Dear Mr. John Owner,

John, I am in receipt of your letter, and wanted to get back to you with a response to some of your questions. When beginning a business, “YOU” as the owner, must consider what form of business entity to establish. Your business structure determines which income tax return form you have to file. The most common forms of businesses today are the Sole Proprietorship, Partnership, Corporation, and S Corporation. A Limited Liability Company (LLC) is a relatively new business structure allowed by state statute. John, you want to generate revenue of course, but you also have to protect any personal assets you may have in the event of a lawsuit. When I refer to personal assets, I am referring to your house; savings; retirement; car and any other possessions that have significant value that can be attached to a lawsuit. John, it sounds like you are just in the initial stages of formulating your business. I am going to share with you some basic answers to your questions, however, I would recommend highly to develop a business plan for the type of business you finally decide on. Whether you fund yourself or need to secure funding through a private investor, a

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