Essay about W4 Assignment

Submitted By cupcake1026
Words: 991
Pages: 4

“Business Structure”
Theresa M. Odom
BUS 311
Roger Pao
September 2, 2014

Business Structure If I were to start my own business, I would choose a Limited Liability Company. There are many pro’s and con’s to each business entity structure but I will discuss why I choose a Limited Liability Company as my own business structure. I will go through the steps to form a Limited Liability Company, personal liability for the owners and the ways in which myself and/or the company is taxed. To start I will explain what the Limited Liability Company (LLC) represents. This is a combination of the best features from both a partnership structure and a corporation structure. A Limited Liability Company is typically easier to form with “flow-through taxation” (Rogers, 2012), and the business holds the liability where the owners do not. “The purpose of an LLC is to allow one or more people to operate a business and have liability protection along with certain tax advantages. Another purpose of an LLC is to give business owners an entity that is flexible and easy to maintain, while requiring fewer formalities than other business entities, such as corporations” (Legal Zoom). In order for me to start my own business as a Limited Liability Company, I would first have to choose a business name. There are restrictions for each state on business names such as my name would need to be different from another LLC in my state, the name cannot include restricted words and the name must indicate that it’s an LLC (SBA.gov). Once I decide on a business name and I register with the state, I would then need to file the ‘articles of organization’ that shows all information such as the address and all members. Members are the owner or owners of the LLC and if there is more than one owner, it is a good idea to have an operation agreement that shows the breakdown of the owners percentages for profits and losses as well as their rights. Having an operation agreement helps avoid disputes later on and help protect those involved (Legal Zoom). After registering my business and obtaining any licenses or permits then I am ready to go. If I need employees then this would be the time to start hiring and making business connections whether it is vendors or other businesses for PR. Then I would make sure to promote my business in different ways in order to get the word out about my new business. Making connections with others and being professional goes a long way with creating loyal customers and referrals. Once employees are hired, there is a list of things involved with policies, the look and presentation expected of them, and getting their information in order to pay them. Having employees is a big responsibility and liability in its own. There is one main reason I would choose a Limited Liability Company as my business structure. This reason is the liability protection for the members involved. I have a family member who has their own business as a sole proprietorship since it was just them at the beginning. Now that the business has grown, employees were hired and a business space was leased. So with that, a LLC business structure is needed for the protection of my family member who owns the business. With a Limited Liability Company the personal assets of the owner is protected from the business liabilities. Without this protection, one could lose more than just the investment into the business but personal assets as well. There are disadvantages to having a Limited Liability Company as a business structure, however I see the advantages out weighing them. One disadvantage would be if a member decides to leave the business then it is dissolved with the other members left with the obligation to close the business. One thing I would do in order to prevent this would include a provision in the operating agreement to prolong the life of the LLC if a member…