Limited Liability Company Structure Outline

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Abstract This essay outlines the best business structure for a sample company wishing to open a restaurant. The essay details why this structure is the most advantageous for the company. The advantages are listed and discussed in detail, explaining how each element applies to business law and operation for the sample company. One of the most defining elements of a new business is the business structure it assumes. This will determine the liability of its owners, how the company and its owners are taxed, how profits and losses are distributed and the company's management structure. For this reason, it is essential that new companies evaluate each type of business structure as it applies to their company's needs and chose a structure accordingly. In the instance of Joe and Jill Smith, a married couple who are opening a restaurant, a limited liability company would be the ideal structure for their business as it allows the owners to be taxed only once, provides liability protection for the owners, allows the business to grow while staying family owned and the paperwork is simple. As a limited liability company, the Smiths will benefit from the pass-through tax structure unique to this form of organization. According to the Internal Revenue Service, "the federal government does not recognize an LLC as a classification for federal tax purposes. An LLC business entity must file a corporation, partnership or sole proprietorship tax return" (Internal Revenue Service, 2012).

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