You now understand Sally’s ambition, how she thinks, her quest for perfection, and her focused vision for future success. From your perspective consider, (1) what form of business, an LLC; S-Corp; or Corp, matches the business platform you have been pursuing with Sally? Based on the information you have now acquired about the direction of the business, (2) do you perceive the need to change your original choice of formation to one of the other forms? (3) Why or why not? You have reviewed all aspects of becoming a legally recognized business. You understand the tax issues, the management structure options, raising operating capital, the various types of insurance coverage required, and the necessity of having peace of mind in the event of a catastrophic moment. As a manager-owner, the concept of “Piercing the Corporate Veil” may give you a sinking feeling when confronted with a questionable operating decision that may trigger both company and personal liability. (4) What steps can you take to avoid facing situations that trigger a court to Pierce, the Corporate Veil of your company? You have a lot to ponder in deciding the best form of governance and assuring the one you select meets Sally’s management style. (5) In determining the form of your business organization (an LLC, S-Corp, or C-Corp.) and matching Sally’s long-term plans, consider which provides most the security, protection against personal liability, management control, financing capability, and long-term expansion planning. (6) Would Sally want a Board of Directors managing her menu?
We know Sally successfully operated her own multimillion-dollar business with sufficient business expertise and without a corporate board or shareholders. We know she fully funded her business and carries no debt that would impede this new venture. We know she has worked well with you as a team and owner in the drive to establish this enterprise. Carefully consider these issues before selecting an organizational form.
Sally has found several documents to help pick which type of corporation to form for the business you are building with her. Feel free to use this information. She has shared them here: These documents are listed in the attachment section.
· Choosing an Entity Comparison Chart (PDF).
· Business Selection Worksheet (PDF).
· Forming a Corporation Checklist (PDF).
· Forming and Organizing a Corporation (PDF).
· Forming and Organizing an LLC (PDF).
· Business Structures (IRS). https://www.irs.gov/businesses/small-businesses-self-employed/business-structures
· Choose a Business Structure (SBA). https://www.sba.gov/business-guide/launch-your-business/choose-business-structure
Create a matrix charting the pro and cons and advantages and disadvantages for the following forms of company organizations:
Your table should look something like the Example listed in the attachments section.
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