Share
Explore BrainMass

Please provide different opinions in determining the best fo

Please provide different opinions in determining the best form of business of business entity for a business having the following characteristics and explain why you chose that form of business:

1. Small business,
2. Local in nature
3. Three owners: two contributed a different amount and the third is contributing his or her services in lieu of capital, each of the owners has a spouse and adult children.

I have to choose among: a general partnership, a limited partnership, a LLC, a type S Corporation, and a type C corporation.

Solution Preview

You could really select any of the ones listed, but your best choice is a general partnership. The most important point in the above scenario is the third item, where one of the owners contributed their services instead of money, as capital. The spouse and children really aren't significant, as opposed to if the owners were single. Because it is small and local in nature, there is not a great need for shareholders, where the company would be selling large amounts of stock, so we can do away with a corporation for right now, until the business gets off and running, and begins to grow substantially, at which time it can be incorporated, and then file for S status, in order ...

Solution Summary

Please provide different opinions in determining the best form of business of business entity for a business having the following characteristics and explain why you chose that form of business:

1. Small business,
2. Local in nature
3. Three owners: two contributed a different amount and the third is contributing his or her services in lieu of capital, each of the owners has a spouse and adult children.

I have to choose among: a general partnership, a limited partnership, a LLC, a type S Corporation, and a type C corporation.

$2.19