BUSI603 DB Response 3b

BUSI603 DB Response 3b - DB Response 3b The emphasis you...

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DB Response 3b The emphasis you placed on tax implications was refreshing because there have been few classmates to mention this important concept. Mike should certainly consider what would be best for him personally as a taxable citizen of the United States, especially concerning what will be his main mode of income—the diner. We agree that Mike should enter some form of partnership, whether that is a Limited Liability Partnership, or some other form. However, Mike’s choice of partner is paramount and should not be taken lightly even if the agreement does not hold Mike personally responsible for the shortcomings and financial hardships of the company. While Mike would not be able to use his partnership as a tax shelter, due to the Tax Reform Act of 1986, a partnership would at least save him from the tax burden of being sole proprietor over the business (Kleinberger, 2009). “Almost everywhere in the United States, more limited liability companies are formed each year than are corporations” (Kleinberger, 2009, p. 446).
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This note was uploaded on 03/11/2010 for the course BUSI 603 taught by Professor Dr.ellis during the Spring '10 term at Liberty.

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BUSI603 DB Response 3b - DB Response 3b The emphasis you...

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