Heidi Birmingham and James T Roberts have decided to create

Heidi Birmingham and James T. Roberts have decided to create a business. They have financing available and have a well-developed business plan. However, they have not yet decided which type of legal business structure would be best for them.

Required

Write a memop to these two individuals outlining the types of situations in which the partnership form of legal structure would be the best choice

Solution

MEMMO

from ; analyst

to; heidi and james

I\'ve heard horror stories from people who, in hindsight, wish they had taken the time and spent the money to get expert advice upfront,\" Kalish says. That advice can come from a variety of sources, ranging from the no cost/low cost, such as the SBA or the Service Corps of Retired Executives (SCORE), to pricier attorneys and accountants who can serve as valuable sources of information throughout the life of your business.

Types of Business Entities
The type of business entity you choose will depend on three primary factors: liability, taxation and record-keeping. Here\'s a quick look at the differences between the most common forms of business entities:

Selecting a Business Entity

When making a decision about the type of business to form, there are several criteria you need to evaluate. Kalish and EnviroTech co-owner John Berthold focused on the following areas when they chose the business format for their company:

1. Legal liability. To what extent does the owner need to be insulated from legal liability? This was a consideration for EnviroTech, says Kalish. He and Berthold had a hefty investment in equipment, and the contracts they work on are substantial. They didn\'t want to take on personal liability for potential losses associated with the business. \"You need to consider whether your business lends itself to potential liability and, if so, if you can personally afford the risk of that liability,\" Kalish says. \"If you can\'t, a sole proprietorship or partnership may not be the best way to go.\"