Question

you will give an example of a hypothetical small businessstartup situation and recommend the particular business form youfeel is most appropriate based on the characteristics of thebusiness in your example and the benefits of your chosen entity,and you will justify your choice.

Insight gained from this discussion will be useful in choosing theappropriate business form for the clients from the final projectscenario as you complete Milestone One.

Sole proprietorships, partnerships, limited liability corporations,C corporations, and S corporations all have distinct potentialadvantages and disadvantages for tax purposes. However, potentialtax implications must be considered in tandem with thecharacteristics of a business and the expectations and goals of thebusiness owners to ensure the best choice is made. When working asa financial advisor, one issue that often arises is the need toassist a new business owner in identifying the correct form abusiness should take, mainly for tax purposes.

Choose one of the five taxable entities and present an exampleof a specific hypothetical startup business situation for whichyour chosen entity might be appropriate, given the businesscharacteristics of the example you provide and the potentialbenefits a particular form of entity offers. For example, if yougave the example of opening a chain of gas stations with threeother investors, you would suggest what type of entity suits thesituation and explain your reasoning. Assume that one of the ownersof your hypothetical business is a Canadian citizen who is not aU.S. resident alien.