Business Law Paper
Riley T. Yates
April 2, 2012
Business Law Paper
In setting up a new business the first step is setting up the best business structure for the need of the business. There are many different things that need to be looked at in order to determine the correct entity that will be used. Will there be partners is a big question in this determination, another questions which is the most correct for the business legally. Another consideration needs to be the legal liability as well as the tax liabilities in considering the best choice for the entity of the business. Restaurant/Bar
Lou and Jose are in the process of setting up a future business of a restaurant and bar. The financial backing of the business will be available through a third party. In reviewing their status they have found that the best and most practical entity for them to use is a partnership. The partnership entity is one of the simplest entities to start, as one of the main prerequisite is that you must have two or more members. In the case at hand we will be dealing with three members, Lou, Jose and Miriam. Miriam, the third owner, will be the financial backing for the business; here roll in the business will strictly be as a silent partner. However, Miriam will share equally in the profits or losses in the company with Lou and Jose. In the situation of the partnership, the annual income that is generated by the business must be filed with the Internal Revenue Service (IRS) . Every partner in the business must include “his or her share of the partnership's income or loss on his or her tax return” (IRS, 2009, para 2). Also in the entity of a partnership, each individual member will be held liable personally for the liabilities and debts of the business. In the case of the restaurant and bar, the future looks as though it will not hold a high risk for personal loss to the partners. Extermination business
We will next look at the extermination...
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