The owners of a closely held business enterprise face numerous problems<br >Some are inherent in the organizational structure of the small business an，<br >~thers exist in enterprises of all sizes. Many problems facing the busines<br >3wner， such as survival in the business marketplace， are obvious. Other prob<br >lems， such as the reduction in business income resulting from the loss of a ke <br >employee due to death， disability， or termination of employment， may not b<br >recognized by the business owner until the incident occurs.<br > Many problems facing the business owner can be avoided， or at lea，<br >mitigated， through proper planning. To plan intelligently to avoid or handl<br >future problems， it is necessary to identify the potential problems and forr<br >3bjectives.<br > The role of the financial services professional is to help business ownei<br >~r professionals recognize these problems and assist in formulating plans air<br >propriate for the special needs of each client. The purpose of this chapter is t<br >discuss typical problems faced by the closely held business owner or profe+，<br >sional. Possible solutions to these problems will be discussed in subsequer<br >=hapters.<br >CHOOSING THE FORM OF BUSINESS ORGANIZATION<br > Business owners are faced with several choices when selecting the form c<br >enterprise. They may operate unincorporated， as a sole proprietorship or as<br >partnership: or incorporated， as a regular (C) corporation or as an S corpora<br >tion. The choice of ownership form is not irrevocable， and owners of existin<br >businesses often decide to change the form if circumstances so dictate. Fc<br >example， the sole proprietor might wonder if the benefits of switching to th<br >corporate form of ownership are worth the costs of incorporation. Or perhap<br >the owners of an existing closely held corporation are considering the ta<br >advantages of a subchapter S election.<br > The choice of a form of ownership is a complex decision facing all busi<br >ness owners because it will have a significant impact on the initial start-u<br >cost， the control and flexibility in management， the taxation of the busines<br >and individual owners， the ability of the firm to raise capital， and the busines<br >risks absorbed by the individual owners. Since it is unlikely that any one tort<br >