W4 - Discussion 2 - A client comes to you thinking about...

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A client comes to you thinking about starting a consulting business. Your client is specifically interested in what type of entity should be created for this new business. Based on your readings or any additional research you may have done, discuss the advantages and disadvantages of the following: sole proprietorship, partnership, and corporation. Based on these advantages and disadvantages provide a clear recommendation to your client. Sole Proprietorship is someone who owns an unincorporated business on their own. However, if you are the sole member of a domestic LLC, you are not a sole proprietor if you elect to treat the LLC as a corporation (IRS.gov). This form of entity is simple to start and has no double taxation. A partnership is a business with two or more person as owner. Each contributes with money, labor or skill, property, and expects to share in profits and losses of such business (IRS.gov). It is recommended to have some sort of business agreement between the people involved.

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