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Concepts Within Business and Entrepreneurial Issues

1. Explain how you understand the advantages and disadvantages of the alternative legal forms for organizing a new venture to be.

2. Explain and compare the S corporation and limited liability company as alternative forms of incorporation.

3. Explain how you understand what difficulties may arise when owners are reluctant to delegate or give up responsibility.

4. Describe how you understand the role of budgets in preparing pro forma statements.

5. Describe the application and calculation of the break-even point for the new venture.

6. Describe why positive profits can still result in a negative cash flow.

Solution Preview

1. I essentially understand the advantages and disadvantages of the alternative legal forms for organizing a new venture due to the fact that some of the legal forms offer an equitable amount of risk to all of the individuals involved. Others legal forms for organization present situations where one or more of the individuals or organizations involved in the agreement may take on a greater level of risk. Some of the alternative legal forms for organization offer the means by which one individual will be able to gain all of the benefits from the venture, and subsequently assume all risk involved in the venture. Certain legal forms for organization offer tax advantages that are greater than other forms as well.

2. The S corporation differs from the LLC in that the S corporation is a legal form of organizing where the only corporation income is subject to implement tax or the payments or salaries paid to the owners and employees within the corporation. In addition, there are a limited number of shareholders allowed in an S Corporation (75), and profits are ...

Solution Summary

The solution discusses concepts within business and entrepreneurial issues.

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