Reference no: EM133271919 , Length: word count:800

Assignment - Which Business Entity? - A Taxing Question

Learning outcome 1: Analyze taxation considerations of various types of business entities.

Overview
One of the most important decisions for the formation of a business is choosing the type of business entity that the business is to be registered. The decision has significant implications such as taxes, filing requirements, ability to raise capital, legal requirements, owner equity, and many other considerations. In this assignment, you will recommend a corporate structure for a specified company that is focused on tax-related considerations.

Preparation
The following resource provides optional guidance for this assignment:
Choose a Business Structure.
This resource provides guidance on how to choose an appropriate business structure.

Scenario
Imagine that a friend is starting up a business and asks you what type of legal business entity she should create. She explains that she really wants to keep what she earns, saying, "I don't want to pay a penny more in taxes than I have too!"

This is not a simple question, but you want to keep it relatively simple for the sake of your conversation with her. You'll need to know a bit more before you make your recommendation. Then of course, you'll have to explain to her why your recommendation is the most prudent decision.
Choose from one of the following businesses (or another of your own choosing):
Wholesale tack shop.
Certified financial planning service.
3D printing manufacturing company.
Retail ice cream shop.

Instructions
Consider the scenario above and complete each of the following parts of the assignment (in 3-4 pages) in an organized and professional manner.
Part 1: Gather Information
Explain 3-4 of the most important questions or information regarding the business that will drive your advice, including why they are important. You'll need to make some assumptions to form your questions. Then provide your own realistic answers to those questions. These answers should directly inform your recommendation.

Part 2: Outline the Possible Options
Describe the two best business entity types from a high level, making sure to highlight significant pros and cons of each. The best entity type is one that considers solutions that heavily weight tax related implications.

Part 3: Share Your Recommendation
Recommend the superior option, making sure to justify your choice with sound tax-related rationale. Consider the following criteria:
Tax savings.
Complexity-compliance, documentation, accounting workload, et cetera.
Effort or costs required to legally establish the company.
Any other items that you think are important.