Business Forms Selection
What legal business Entity (such as a Partnership, LLC, S Corporation or C corporation) would you suggest they select for their situation to best meet their needs and goals? Fully explain your reasoning pros and cons for this entity.
I would suggest that they select a partnership. This is mainly due to the of the simplicity of formation and operation, and the provision for the decision on how to share the responsibilities and returns based on each partner’s contribution towards the business, either financially or in the running of the business.
Pros of a Partnership
A partnership has the advantage of tax benefits as opposed to corporations. General partnerships may not pay taxes, as it passes through any profits or losses to its partners.
A partnership hemps in bridging gaps in knowledge and expertise in business as different members contribute their skills in the business.
Prospective partners can bring more financial resources into a business. One partner may have lots of connections in the financial world hence getting more funding, and another may have a lot of potential customers hence increasing the revenues (Martinuzzi, 2016).
Cons of a Partnership
Partners in a partnership business entity have unlimited liabilities hence they may lose they personal resources if the partnership goes bankrupt.
Issues can arise that can cause a difficult working relationship with a partner, for example when one partner is less relia…
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