Need some assistance in creating a paragraph in regards should the ownership interests be proportionate to their capital contributions or should some credit be given for "sweat equity"?© BrainMass Inc. brainmass.com October 16, 2018, 9:56 pm ad1c9bdddf
Three family members go into the pizza business. Ernie Bilko has some pizzeria business experience. His uncle John Hall is willing to invest. Ernie's cousin, Duane Doberman, has some spare cash and spare time. John, who knows nothing about pizza, puts up $80,000 cash and hopes for a 10 percent return on his investment. Ernie contributes only $5,000, but he wants annual pay of at least $36,000. Duane invests $15,000 and agrees to be part-time bookkeeper and responsible for obtaining permits, licenses and insurance. Ernie will be in charge of the kitchen and the hiring of employees. Ernie will also be in charge of leasing the space needed for the business and contracting with vendors for the equipment necessary to start up the business. All three of them expect that it will take at least a year before the business turns a profit.
The three can't decide if they should incorporate the business as Pizza Baxter, Inc.; or a Partnership doing business as (dba) Pizza Baxter or a limited liability company.
a. Should the ownership interests be proportionate to their capital contributions or should some credit be given for "sweat equity"?
Let us discuss first of all the forms of organization:
This organization is owned by single person and is the simplest form of organization. He is fully responsible for all debts and obligations related to his or her business and have got unlimited liability.
? Ease of formation
? Low start-up costs
? Less administrative paperwork than some other organizational structures (such as incorporation)
? Difficulty raising capital
? Unlimited liability
? Lack of continuity in business organization in the absence of the owner
http://www.cbsc.org/servlet/ContentServer?pagename=CBSC_ON%2Fdisplay〈=en&cid=1085667968842&c=GuideFactSheet as retrieved ...
This explains the concept of Sweat equity
Acme, a multi-billion dollar public MNE that is incorporated in the U.S., must next obtain external financing for its proposed overseas production facility
Having previously identified the location of its greenfield investment, Acme, a multi-billion dollar public MNE that is incorporated in the U.S., must next obtain external financing for its proposed overseas production facility. It has been estimated that the acquisition will cost $500M and all funds will be secured in the U.S. Your job is to explain to this committee some of the financial aspects of this acquisition.
Deliverable: At the next steering committee meeting, you will provide a detailed presentation of the characteristics of the various external financing alternatives, including the advantages and disadvantages of each. Your report should conclude with a recommendation of which alternative (or combination of alternatives) should be used to finance the overseas investment.
Important Note:The greenfield investment is in Mexico.
What I need answered is the external financing with alternatives for this greenfield investment in Mexico. The financial aspects of this aquisition. Help with understanding the advantages and disadvantages of each alternative or combinations of alternatives. Any kinds of hints or information that would help in writting the paper. Maybe include some website or direct me to information in your resolution. Thanks
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