Farming Business Organizations
ACCT 511: Advanced Business Law
July 4, 2014
Abstract
Alex, Bill, Carl, and Devon inherited their Dad’s farming business. However, none of his sons wanted to take control of the farming operations so they allowed their cousin Xavier to handle it. The sons wanted to form a business entity that includes Xavier As their accountant, the sons would like to find out which business entity is best to minimize their taxes, avoid personal liability, and operate their business in accordance to the Christian worldview. Furthermore, they would like to keep the business within the family without any strangers owning part of the business.
Selecting a business organization for a company can be tedious decision to make; every entity has advantages and disadvantages. Alex, Bill, Carl, and Devon have hired an accountant to help them assist them in making this critical decision. They would like to accomplish low tax liability, avoidance of personal liability, and keeping the business in the family. Moreover, their cousin Xavier has been involved with the business for 5 years and I would like to continue working for the company. Since the sons did not find interest in handling the business operations, they took Xavier’s offer. Before creating a business entity, they want to possibly include Xavier by selling some of their interests to him or even to their kids. Xavier’s constantly try to build the company, and brought the idea of expanding operations to include a vineyard. This paper will discuss each business organization advantages and disadvantages, the accountant’s advice, and the Christian worldview pertaining to business organization and tax regime.
Sole Proprietorship
The easiest and simplest business organization is a sole proprietorship. As far as taxes concerned, it is recorded on the schedule F of the individual income tax return, and its recordation is straightforward. One of...