My sister Heidi, my best friend Janis and myself have always wanted to operate a full service restaurant at the Jersey shore. We often joked about the various different roles we would perform. Janis wanted to bartend. Heidi wanted to be the hostess and look after the business end. I loved to cook and bake and although I did not train at a culinary institute, I had spent many summers working in kitchens at the shore. All of us wanted to be equally involved in the work, hiring decisions and the business aspects of the restaurant. We had a concept, a name, and a location. The restaurant would be called "Lobster Rolls", located in Love Ladies. My goal was to define New England summers at the Jersey shore by offering corn on the cob, salt-encrusted shrimp, crab and clam chowders, blueberry crumble pie and lots of lobster reproduced recipes from my grandmother.
We thought we were off to a great start.
As we investigated our options, we began to realize we had much to learn and many choices to make. We needed to choose a business structure. What was going to be the best business entity for our operation? We did want the best protection from general business liabilities that might threaten our hard earned assets. All of us owned our own homes and we did not want any of our family assets ruined. In addition, how could we get the best tax breaks out of our business? Obviously, we would need to consult a lawyer and tax advisor.
We considered a proprietorship because it was quick and easy to set up the business operation. We wouldn't need start up costs and it seemed so simple. For tax purposes, profits and losses flow through to the tax return...