M E M O R A N D U M

TO: Ms.
FROM: VP of Small Business Developing
RE: Can you help me grow my business?
DATE: November 11, 2012
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Ms. C,
I am glad to hear that your business is doing so well. I understand your concerns for the future and hope that I can provide answers and reassurances concerning the new direction for your company.
I know that you want to expand your business financially and geographically. It is my professional opinion that you should incorporate you company with an S classification. Here are the reasons why I think an S Corporation will benefit your almost restructured company.

You were concerned with faulty craftsmanship of subcontractors so I would recommend that you have a contract that states that the subcontract is liable for their work and they must provide their own insurance. The newly incorporated should buy vehicles and have those vehicles insured under the incorporated name. This would allow any driver to be covered under the company’s driver’s insurance. As an S Corporation you could buy workman’s comp insurance to make sure that all of your employees are covered in case of accident and /or injury.
If the business were to fail there are several things that could happen. First would be to sell the corporation along with the stock, then all of the liability would belong to the new owner. Or, Sell business and keep corporation. Finally, you could dissolve the corporation and pay off all debt or declare bankruptcy.
When you die the company would continue to live. Your share of the company would be passed down to your heirs or your closest living relative, unless you have a will that states otherwise. With an S Corporation there can be no more than 100 shareholders that share one class. One class of stock means that all shareholders will be