Tax Planning & Business Structures

This report analyzes tax planning strategies for partnership firms and corporations, highlighting the differences in tax provisions under US federal tax law. It compares the advantages of corporations over partnerships, focusing on limited liability and fundraising capabilities. The report also examines company succession planning aligned with a company's vision, particularly concerning expansion strategies. A crucial aspect is determining the most suitable planning strategy to minimize tax liability, considering projected turnover. The report also discusses the role of trusts, specifically the Australian Capital Territory trust, in achieving objectives like promoting environmentally responsible development and social welfare, while also exploring their use in tax minimization for small businesses. The report concludes by emphasizing that the choice of corporate structure depends heavily on projected operational performance and turnover.

Tax Planning between the partnership firm and corporate.
The provisions for taxation are differentiated for the Partnership firm, individual and
corporation. In case of partnership firm, the profit is distributed among the partners,
and they are personally liable for a tax, as per US federal tax law. Personal tax
liabilities are computed based on the tax scale, states in US federal tax rules, basically
the tax rate falls between the 10 to 37 percentages, these rates are applied based on
the incomes.
While tax liabilities of the corporation are computed based on the turnover of the
corporation, and for corporate tax rate are falling between the 15 % to
38 percentages. (Differencebetween.net. (2019). In short the estate planning
to minimize the tax obligation are different in case of partnership firm and in the
case of a corporation.
Advantage of the formulation of corporation V/S Partnership firm
The corporate serve a number of benefits and advantage again the partnership firm,
looking from the corporate structure points of view the formulation of corporate are
more expensive than the partnership firm. Further Personal liabilities of the promoters
and shareholders are limited to the outstanding amount of shares only, where such
things are not found in case of partnership firm. More over the liabilities of partners
under partnership firm are unlimited. In addition to these company can easily invites
the public for financial assistance, while such options are not available in case of a
partnership firm. (Smallbusiness.chron.com. (2019).
Company Succession Plan and its connection with the vision
The company currently looking for Expansion of its operation as a part of its visionary
strategy. Further, new product and services are added by firm in current portfolio.
The expansion strategy required aggressive marketing in other geographical areas,
here company use its brand and popularity in the current geographical market
to introduce its new product and service in other geographical area and the expansion
strategy completely aligns with the company vision statements,
(Smallbusiness.chron.com. (2019).

Which planning strategy is most suitable to minimise the tax liability
The final decision for type of corporate structure is widely influence by the operating
performance and turnover of the propose project.
Where the projected operation and sales are average like within the range of $ 100000
to $ 800000, then the partnership firm is the most suitable option. But when it is
projected that a tune over of the firm, in million and billion Doller, then the
formulation of corporate entity would be best suitable option to minimize the tax
liabilities.
IV Trust
A) Here we are using the Australian Capital Territory (trust), the trust is
constituted with the numbers of objectives such as promote environmentally
responsible, urban development practices. Etc. the trust are eligible for
expansion of income received and utilised in context to promote the objective
and goal of the trust. Further, Trust is specifically formulated with the
intention to promote social activities and or to implicate the corporate social
responsibilities plans, one of the objective of the trust is to promote the social
welfare.
B) Many time trust are crated for the objectives otherwise than of the avoiding the
tax liabilities, a small business enterprise formulate a trust with the intention to
manage their business, or the assets on behalf of other, formulating a trust to
manage the assets is one of the best ways to create wealth in long run.
C) For business entities using the trust is an effective way to minimize the tax
liabilities, there are numbers of expenses and income which are specifically
exempted under the US tax system, hence the small business owner uses a trust
for estate planning and similar activities.
D) Trust is a body corporate, which are characterized, by the trusty, who carry out
the fiduciary duties, like administrators or agents. Whereas the company is a
body corporate, formulated under the specified laws and administrate the
properties and assets on behalf of other interest groups, commonly known as a
state holders. (The Balance Small Business. (2019).
References

Differencebetween.net. (2019). Difference Between Trust and Company | Difference
Between | Trust vs Company. Available at:
http://www.differencebetween.net/business/difference-between-trust-and-
company/ [Accessed 2 Apr. 2019].
Smallbusiness.chron.com. (2019). The Advantages of a Corporation over a
Partnership and Sole Proprietorship. Available at:
https://smallbusiness.chron.com/advantages-corporation-over-partnership-sole-
proprietership-19197.html [Accessed 2 Apr. 2019].
Smallbusiness.chron.com. (2019). 5 Major Differences between a Corporation and a
Partnership. Available at: https://smallbusiness.chron.com/5-major-differences-
between-corporation-partnership-18830.html [Accessed 2 Apr. 2019].
The Balance Small Business. (2019). Learn About Corporate Tax Rates and How to
Calculate What You Owe. Available at:
https://www.thebalancesmb.com/corporate-tax-rates-and-tax-calculation-397647
[Accessed 2 Apr. 2019].