You will give an example of a hypothetical small business startup situation and recommend the particular business form you feel is most appropriate based on the characteristics of the business in your example and the benefits of your chosen entity, and you will justify your choice.

Insight gained from this discussion will be useful in choosing the appropriate business form for the clients from the final project scenario as you complete Milestone One.

Sole proprietorships, partnerships, limited liability corporations, C corporations, and S corporations all have distinct potential advantages and disadvantages for tax purposes. However, potential tax implications must be considered in tandem with the characteristics of a business and the expectations and goals of the business owners to ensure the best choice is made. When working as a financial advisor, one issue that often arises is the need to assist a new business owner in identifying the correct form a business should take, mainly for tax purposes.

Choose one of the five taxable entities and present an example of a specific hypothetical startup business situation for which your chosen entity might be appropriate, given the business characteristics of the example you provide and the potential benefits a particular form of entity offers. For example, if you gave the example of opening a chain of gas stations with three other investors, you would suggest what type of entity suits the situation and explain your reasoning. Assume that one of the owners of your hypothetical business is a Canadian citizen who is not a U.S. resident alien.