Mcgee Cake Co Essay example

The personal liability exposure would be minimal. With an LLC if I messed up the partners would not be responsible. The consequences are not as bad is if I was in a corporation.

Disadvantages: unlimited liability, limited life, difficulty in transferring ownership, hard to raise capital funds. Some advantages: simpler, less regulation, the owners are also the managers, sometimes personal tax rates are better than corporate tax rates.

The continuity of his company would be greater than his current sole proprietorship, by would be governed by his state laws. Without knowing the state he would be creating the LLC in, we can only state that he would be able to include options in the governing documents giving his family a change to buy his share if he does die, which would greatly disrupt the company’s operations. He

It would also be beneficial to set up a limited liability company. (LLC) A LLC limits the partner’s liability to your basis in the company

Sundae Magic, LLC, will be classified as a Limited Liability Company (LLC) due to the personal asset protection and federal taxing procedure this designation provides to its managing members. We will chose to be taxed as a disregarded entity during the start-up phase and will reevaluate this option, considering a corporate tax status, after the business has completed two years of operations. The managing members will consist of myself, Luz Kanwar with a 60% interest in the business, and my business partner Philip Walker with a 40% interest in the business; financial distributions will correlate to percentage of ownership.

Limited Liability Company (LLC) combines the tax advantages of a partnership with the limited liability aspects of a corporation. LLC’s are governed by the Uniform Limited Liability Company Act (ULLCA). All members of the LLC enjoy limited liability unless there is serious misconduct is committed by said member(s), or a member fails to follow through on an obligation. All this should be outlined in your preformation contract. You will have more flexibility with taxation and options on how to manage the company. It would be advisable to also have an Operating Agreement. This will dictate how management will be hired and fired, division of profits, how to transfer interest in the event a member chooses to opt out or dies. What steps to take in the event of dissociation of a partner, and if it causes the dissolution of the LLC. Most importantly how the members vote in the LLC. The weight of the members vote is in accordance with the member’s capital

When it comes to partnerships Alex, Bill, Carl, and Devon will have two options- a general partnership or a limited partnership. Partnerships are beginning to be a business form of the past. Once upon a time, partnerships were “the default form of business and provided the benefit of pass-through taxation, but lacked the important feature of limited liability” (Chrisman, 2010, p. 465). In a general partnership, each partner associated with the entity will be held liable for their own business decisions as well as

Jeb and Josh can be employed by their LLC. The tax deductions available to the LLC are plentiful: medical expenses, pension plan, business trips and entertainment. There are more sources of capital for an LLC than for a sole proprietor and partnership. With an LLC Jeb personal creditors’ cannot sue the company, and Josh is not liable for Jeb’s personal obligations. This business should protect the members’ personal asset from a lawsuit resulting from Jane’s injuries.

A partnership is the best form of business given Shania’s situation. She has support from all angles that want to help her Christian coffee shop be a success. A limited liability partnership is best suited for Shania because of her possible partnerships with her husband, sister, and neighbor. According to the Limited Partnership (2015) article, this form of business is a “voluntary association where one or more partners contribute capital only, and those partners play no role in management.” Her husband wanted to make a contribution to Shania’s business but not in the lane of management, so by using this partnership he can still contribute his capital and maintain his partnership. The liability is limited to the amount of capital that the partner contributes. As a “silent partner” Marvin can make investments with the company, but not have any voting power or control over day-to-day operations.

A Limited Liability Company (LLC), as the name states, has the ability in keeping your liability limited as a professional owner. This is fundamental in protecting your personal assets by separating them from your business assets. In choosing to run a LLC company, we have agreed that a manager-managed business would be conducive to our field of industry. Although one person will have the authority in overseeing the daily tasks of running the business, all non-managing members will still have an input in all decisions in regards to the enterprise. Contract negotiations and employment are just a few of the joint duties of all members. Running an LLC has many advantages like flexibility, limited liability in business related debts, pass-through taxes, and reliability standing. However, with perks there are always some downfalls, such disadvantages consists of being subjected to self-employment tax or if a member departs the LLC ceases to exist, although an Operating Agreement can reverse this challenge. As you can see, running an LLC has more pros, out weighing the cons of such companies.

Proprietorships have three advantages: they are easy and inexpensive to form, subject to few regulations, and no corporate income taxes. The disadvantages are difficult to raise capital, unlimited liability and limited life. Partnership are similar to proprietorships in that they can be stablished relatively easily and inexpensively. The partners are generally subject to unlimited personal liability, this makes it difficult for partnerships to raise large amount of capital. Corporation also have unlimited lives, and easy transfer of ownership, limited liability and ease of raising capital to operate larger businesses. The disadvantages are double taxation, the corporation’s earnings are taxed; and then when its after-tax earnings are paid out as dividends, those earnings are taxed again as personal income to the stockholders. Limited liability reduces the risks endure by investors; and other things held constant, the lower the firm’s risk, the higher its

The corporation and stockholders have the tax burden in a corporation. In whole, from the owners’ point of view, it is more sensible to form a corporation that has a little more flexibility and less liability versus a partnership or sole proprietorship.

This memo is to advise the Smithson family, and to provide an in-depth summary regarding the options and direction the family can go while starting their business venture. This memo will outline three options that can be taken by the family as business entities that will help them grow their business nationally, as well the option of an international growth, while keeping the business separated

The default classification for an LLC is a partnership; this is because it has more than one owner. The alternative classifications for Bruce and Bob's LLC are a C corporation and an S corporation. The tax consequences are that double taxation applies if income is distributed to them as owner. This is because the LLC will pays taxes on income and then the owners will pay taxes on their portion of the income received by them. Form 8832 would need to be filed with their return for a C Corporation. In this case of the S Corporation from 2553 would need to be filed instead. With the S Corporation they can avoid double taxaion and use losses to offset income from other sources. The advantages of choosing these tax classifications come from property,

As with any kind of business formation, there will always be, to some extent, negative aspects associated with the creation. To this date there is no perfect form of business entity. When deciding on which entity is best suited for a business, there are many things to be considered. Prior to deciding on a business structure, some major points to be thought about are both the legal and tax ramifications associated with the entity chosen. Another criteria that should be considered are the costs connected with the entity type. These cost include the cost of formation as well as any continuing administrative cost that may be incurred. (“Choose Your Business,” 2011)