Most small businesses fail, and the fact that the company is having financial difficulties, despite high demand, suggests that it would be wise for the McGees to protect their personal assets. The food business can be very 'faddish.' Success early on in a business venture related to food does not necessarily bode well for success in the future. Additionally, the McGee's cash flow problems are epidemic amongst sole proprietorships. Credit markets are particularly tight right now, and sole proprietorships have the greatest difficulty of all of the different business structures in raising funds.

The main advantage of maintaining a sole proprietorship is how easy it is to set up compared with an LLC. Filing taxes is also easier, as to file as a sole proprietor the McGees need only file an individual income tax return and itemize their company' losses and profits. Yet while "the looser structure of a proprietorship...
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