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What type of business entity should you form

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You are starting a business that sells pet treadmills. Initial market research shows a potential for high demand in affluent areas and cities with severe weather. You also foresee a lucrative international market and franchise opportunities. You have two options for capital: use your inheritance, which includes a multimillion-dollar home, or allow your two rich friends to join the business. You plan to use traditional marketing and sales methods as well as e-commerce. Before you can go forward, you must resolve the following:
a. What type of business entity should you form? Explain your choice.

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Solution Summary

You are starting a business that sells pet treadmills. Initial market research shows a potential for high demand in affluent areas and cities with severe weather. You also foresee a lucrative international market and franchise opportunities. You have two options for capital: use your inheritance, which includes a multimillion-dollar home, or allow your two rich friends to join the business. You plan to use traditional marketing and sales methods as well as e-commerce.

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I will use a LLC form in the beginning. The advantages of forming an LLC are that the members are afforded limited liability and have pass-through ...

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