Final Paper
NAME
BUS607: Business Law and the Accountant
Professor DATE RUNNING HEAD: FINAL PAPER 2
First, I would look in to the client’s account with great detail . I would look to see what type of growth they have incurred over the past six months, the past year, and possibly even the past two years depending on the length of time that the client has been in business . I would also see if the client has any information from possibly a previous accountant to try and gather as much information as possible . If the growth of their company matches what the client is saying about the expansion of his products, it would absolutely be a promising idea to switch from a sole proprietorship to a Limited Liability Company .
I would recommend the Limited Liability Company because they have recently encountered a problem with their distributor . The distributor has rejected product that was shipped to them from the manufacturer and they are claiming that customers have complained
saying, “that the spray bottles did not work correctly .” The distributor then went on to state that the spray bottles, “sprayed the product in a dangerous way that caused injury to several customers.” If for some reason the distributor or the customers decide to come back and file a lawsuit, I would not want my client in a position where they could lose personal assets . By becoming a Limited Liability Company, my client would become a member and would be able to collect any profits from the company without paying corporate taxes in many states . If my client were to choose to bring in another owner at any point, it would also allow them more freedom of how they would distribute profits amongst the owners .
NAME
BUS607: Business Law and the Accountant
Professor DATE RUNNING HEAD: FINAL PAPER 2
First, I would look in to the client’s account with great detail . I would look to see what type of growth they have incurred over the past six months, the past year, and possibly even the past two years depending on the length of time that the client has been in business . I would also see if the client has any information from possibly a previous accountant to try and gather as much information as possible . If the growth of their company matches what the client is saying about the expansion of his products, it would absolutely be a promising idea to switch from a sole proprietorship to a Limited Liability Company .
I would recommend the Limited Liability Company because they have recently encountered a problem with their distributor . The distributor has rejected product that was shipped to them from the manufacturer and they are claiming that customers have complained
saying, “that the spray bottles did not work correctly .” The distributor then went on to state that the spray bottles, “sprayed the product in a dangerous way that caused injury to several customers.” If for some reason the distributor or the customers decide to come back and file a lawsuit, I would not want my client in a position where they could lose personal assets . By becoming a Limited Liability Company, my client would become a member and would be able to collect any profits from the company without paying corporate taxes in many states . If my client were to choose to bring in another owner at any point, it would also allow them more freedom of how they would distribute profits amongst the owners .
