BUSINESS ENTITY PLANNING WORKSHEET

Prepared on February 01, 2012 I would like more information regarding the following: - Sole proprietorship I would like more information because: - My current business is expanding. Business Name: Trade Name (if any): Address: Phone: ABC Widgets Co. ABC Widgets 8 Hayes St Big City, CA 94901 (415)415-5252 Ext.: 415-413-3432

BUSINESS ACTIVITIES: This business is an existing business, with approximately 100 employees and annual revenues of approximately $1,000,000.00. The primary activities of the business can be described as follows: manufacturing and distributing widgets. Business Owner: Address: James Smith 12 Blue Ave Big City, CA 94901 Phone: 415-444-3333 Ext.: 2323 Percentage ownership of business: 100%

BUSINESS PREMISES: The premises where the business operations are (or will be) located are owned by the business.

The following factors ARE important to the owner(s) of the business: DISTRIBUTIONS OF THE BUSINESS' INCOME: The owners expect to retain most of the income of the business within the business to help finance future growth. FRINGE BENEFITS: It is important to the owners to obtain as much deduction as possible for the costs of the owners' fringe benefits, such as health insurance plans and pension plans. FREE TRANSFERABILITY OF OWNERSHIP INTERESTS: It is important to the owners to be able to freely transfer their ownership interests without such transfer being contingent upon the
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approval of the other owners.

The following factors are NOT of great importance to the owners of the business: LIABILITY PROTECTION FOR OWNERS. Due to the nature of the business and/or the availability of insurance coverage, there is little risk of business liabilities threatening the owners' personal assets. CONDUCT BUSINESS IN MULTIPLE STATES. It is not anticipated, or not of great concern, that business will be conducted in more than one state, so the owners are not particularly concerned about uniform interstate treatment if an LLC is chosen. FISCAL YEAR. The owners are satisfied with a calendar year-end. UNINTERRUPTED EXISTENCE. It is acceptable to the owners that a vote-of-continuance may be required upon the death of a co-owner.

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The following report provides a score for each type of entity, based on the information entered. This summary may provide some guidance in the selection of a business entity form. However, it is inappropriate to select a business structure based simply on the highest score. Each form of entity has advantages and disadvantages that may range from crucial to unimportant, depending on the preferences and circumstances of the owners that should be explored in more detail than what can be done in this program. Entity Type Sole Proprietorship General Partnership Limited Partnership C Corporation S Corporation Limited Liability Company Score 2 0 0 6 2 1

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