Assume you and your spouse are starting a business that you think will make a large profit from very beginning. The business will have medium liability risk. You have personal asset of around half a million dollars. Which type of organization would you choose(corporation, S- corporation, partnership,or sole proprietorship)?why?

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Tod ThielLv2

30 Sep 2019

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Related questions

For a would-be entrepreneur, selecting the proper form of business organization is a very important first step in the process. After some consideration and an assessment of your skills and education, you have decided to start a medical billing service that will provide services to providers in the local geographical area. Ideally, you would like to service physicians, dentists and hospitals.

Determine which of the three forms of business organization (sole proprietorship, partnership or corporation) would be the most appropriate for your new business. Why did you select the form of business organization that you chose? Identify at least three things that should be taken into consideration when making this selection. (4 points)

Based on the form of business organization that you selected, answer the following questions:

a. How easy or difficult is it to set up this form of business organization? (4 points)

b. What type of liability do you have in this form of business organization? (4 points)

c. What tax implications do you need to consider for this form of business organization? (4 points)

d. What will happen to the business if something happens to you, the business owner? (4 points)

Introduction

Now that youâve created the basis for your fictitious restaurant, you can explore more topics that will allow you to record business transactions for your enterprise.

Part 1

Your first step in the project is to write a one-page paper to explain the basis of your business. Which business form (sole proprietorship, partnership, corporation) did you choose and why? Explain the three basic financial statements that your business will rely on to make decisions now that it is up and running. Which financial statement do you think you would rely on the most? Why?

1. Dave and Cindy, who want to start a law firm, each have$1,000 to invest in the business and no personal assets and wantlimited liability protection and only 1 level of taxation. Theywant your advice on whether they should form their law firm as: 1)a general partnership; or 2) a limited liability corp (LLC) Whatbusiness entity would you recommend? Why?

2. Karen, who is setting up a new business, expects that her newbusinessâ income in the first year will be $10,000. If the businessis a C (regular) corporation assume it has distributed $5,000 ofits $10,000 income to Karen as a dividend. Corpâs income tax rateis 35%. Karenâs income tax rate is 30% and her dividend tax rate is20%. For federal income tax purposes, how much would be the incometaxes paid on her businessâ projected income if Karenâs businesswas a C (regular) corporation or was a sole proprietorship?

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