This report provides an analysis and evaluation of the advantages and disadvantages of
four different business starting organizations, and which is one the best one that can be
apply it to our software company considering the requirements and issues that the
company can encounter during the starting up process. The method of analysis and
research used was comparison between the four kinds of organizations agree during the
business plan process and how they would help with the four most important issues that
the company can face. All documents used in this analysis can be found in the appendices.
The first issue that the company is facing is the deciding the way that the company is going
to be run and that can provide the security that our assets are safe. In other words, the first
issue is identity who can is going to be liable in case that there is a problem with the
company. The second issue is how to raise the money or access to capital required. This
issue can be considered the most important one, because it basically decides how much
time is going to take for the company to growth. The third issue that the company is
facing, is deciding how the decision making is going to work in the company. The fourth
and final issue is to decide how the company is going to be taxed. This issue is important,
because depending on the choice of business organization, the company can be taxed
differently and this can make a big impact in the finances of the company.
Each of the four entities has its advantages and disadvantages that can be helpful in
deciding which one is the best to face the four issues that were described above. The first is
a For-Profit Corporation or S Corporation. The advantages that this type of entity has are
that personal assets are protected, so this would help in the issue of liability within the
company. Another advantage is that it has a pass-through taxation, so it doesn’t pay federal
taxes at the corporate level and losses are passed to the shareholders who report them on
their income tax. This helps in deciding how the company is going to be taxed. At the same
time, this type of entity has a straight forward transfer of ownership, meaning that it can
change of owner without great tax consequences. This can be a great point in working on
