Summary, Analysis And Personal Commentary – Coursework Example
Making the right choice of a business entity MAKING THE RIGHT CHOICE OF A BUSINESS ENTITY According to research, financial advisorsinteract more with individuals in business. This calls for them to enlighten their clients with the business intricate. The important options that are to be highlighted include whether the business is Limited Liability Company (LLC), Series limited liability Company (SLLC), Professional Limited Liability Company (PLLC), General partnership (GP), Limited partnership (LP), Limited liability partnership (LLP), C Corporation, and S Corporation (Hopson and Hopson, 2014).
All these concerns have both their merits and demerits. LLC is more flexible than the others are while its shortcoming is that it cannot provide tax-deductible fringes if not taxed as a corporation. SLLC provides liability protection to its members but it has questions on liability shield. The PLLC is good for state licensed professionals but it does not protect them from malpractice claim. The LP provides protection on entity’s torts but requires both a general and limited partner. The LLP protects individual partners from torts but does protect them from contractual liabilities. The partnerships have one advantage in that they are tax free in the business entity in comparison with corporations (Hopson and Hopson, 2014).
Depending on the kind of business one is considering start, they will have an option as per the business demands. For instance, an LLC (Limited liability Company) has the benefit of not being taxed and therefore it is flexible, and Limited Partnership (LP) has restrictions on the number of partners to be incorporated (Hopson and Hopson, 2014).
It is best for business owners regardless of the size of the business to take keen considerations on the concerns that might may be of importance to their businesses. This they can do best by involving their advisors who will in turn serve them out of experience (Hopson and Hopson, 2014).
Hopson, J. F. and Hopson D. P. (2014). Making the right choice of business entity. The CPA Journal, 42-48.