Business Organizations Advantages/Disadvantages

1. Business Organizations Advantages/Disadvantages • Florida Gulf Coast University • Small Business Development Center (SBDC) • Procurement Technical Assistance Center (PTAC)

2. Who are we?

3. Where are we located?

4. SBDC/PTAC Ft Myers Florida (239)225-4220 www.floridasbdc.com www.fptac.org

5. Business Organizations • Sole Proprietor • General Partnership • Corporation • S Corporation • Limited Liability Company LLC

6. Sole Proprietor • Advantages Easy to Form No Legal Documents Federal Income Tax Schedule C Profits/Losses Pass directly to the Owner You are the Boss

7. Sole Proprietor • Disadvantages Unlimited Liability Death-the Business Dies Limited Ability-Raise Funds Limited Fed Tax Deductions

8. General Partnership • Advantages Easy to Form Fictitious Name Direct Pass Through of Profit/Losses Maintain Equal Control Shared Responsibilities

9. General Partnership • Disadvantages Unlimited Liability Death-Termination of Business Decision Making Process Lacks Formal Structure Limits on Ability to Raise Funds

10. Corporations • Advantages Limited Liability Creates Stock Ability to Raise Capital Create Retained Earning Continual Existence Easier to Sell Easier to Deduct Business Expenses

11. Corporations • Disadvantages Double Taxation Corporate Formation Fees Governmental Regulations Corporate Formation and Paperwork

12. S Corporation • Advantages Limited Liability Avoids Double Taxation Same Basic Advantages of a Corporation--- Stocks/Capital Existence Transferable Deductions

13. S Corporation • Disadvantages Corporate Formation Fees Governmental Regulations Limited to Individuals US Citizen or Resident 75 Shareholders – Limited Primary Purpose- Restrictions

14. Limited Liability Company • Advantages Limited Liability for General Manager and Members Various Entity Ownership Pass Through Tax Ramifications Unlimited Number of Owners

15. Limited Liability Company • Disadvantages Formation Costs Lack of Jurisprudence in FL Professional Assistance is Needed to Set Up Tax Implications- Depending on Size

16. Five Critical Factors • Legal Liability • Tax Implications • Costs of Formulation • Flexibility • Future Needs

17. Thank you!Contact SBDC/PTAC at 239-745-3708