In this assignment you are going to select which legal structure is best in terms of achieving the specified owner’s objectives of avoiding personal liability and reducing business taxes.
Most states and the federal government have websites that guide businesses in how to select a corporate structure. For example, the United States Small Business Administration provides this information at http://www.sba.gov/category/navigation-structure/starting-managing-business/starting-business/choose-your-business-stru. On this website under the tab “Choose Your Business Structure,” there are explanations of the advantages and disadvantages of each kind of business structure. Read all the sections: Sole Proprietor, Partnership, and Limited Liability Company. Based on what you’ve read, what advice would you give Susan in the following case study?
Susan Stallings wants to open a business whereby she rents out personal water craft in Florida and Missouri. She can secure the right to run her business out of two large and popular boat docks on major lakes (one in Florida and one in Missouri). She will lease the water craft and, in return, sell rental time to vacationers. She wants you to become the COO and is asking your advice on what legal structure she should use to form and operate the business. Answer Susan’s question using the information provided in your text and the Small Business Administration business structure chart and analysis found at http://www.sba.gov/category/navigation-structure/starting-managing-business/starting-business/choose-your-business-stru.
Draft a memorandum presenting the form of business you recommend to Susan and the advantages and disadvantages of selecting that business structure.The memo should not exceed two pages.