We are beginning working on a business entity analysis assignment. In this assig

Question

We are beginning working on a business entity analysis assignment. In this assignment, you start by considering what your dream business would be, your concerns and the different forms of ownership available.

Describe in detail the business venture-

This should be done in essay form. Remember, the ultimate point of this assignment is to demonstrate your understanding of the differences of all of the business entities and their impact on the issues.

Sole Prop General Partnership Limited Partnership Issue or Consideration Subchapter“C” Corporation Subchapter “S" Corporation Liability Unlimited Unlimited personal Gen Partners (at Shareholders-o Shareholders- no personal lity personal liability personal liability"Joit and Several" least 1)have liability for Partnership unlimited lialty beyond investment beyond investment Limited Partners: Liability limited to investment Ease of FormationNo formal rmalR Requires formalReqires fo filing Requires formal filing and qualification and "election" with IRS No formal requirements requirements filing Ease of OperationNo issue Limited concern- ONLY General Partners operate between Directors between Directors No participation of (major decisions) (major decisions) Limited Partners and Officers (day and Officers (day- Shared operation Shared operation as agreed to-day) and Shareholders (fundamental changes) to- day) and Shareholders (fundamental changes Taxation No additional tax issue or burden Partnership return with Pass through with Pass through double taxation to individual partners Avoids possibility of double taxation Partnership return Possibility of to individual partners Cavitalization Limited to loans Limited to loans Also have limitedIssue stock or (usually banks)(usually banks) partner investment Bonds Limited duration Limited duration Limited duration Perpetual Issue stock or Bonds Perpetual Duration (gen. Partners) flexibility with limited partners Alienation No-General Possible with Limited partners Simple stock transfer Simple stock transfer 0

Explanation / Answer

My dream business venture is to open a world class university where students across the world can get quality education at affrordable price and the form of the business will be for profit. To open a university of such scale what I need most is capital because huge chunks of money is needed to built the insfrastructure and create the system. Apart from capitalization what concern me most is duration because the university should be a perpetual entity. By giving utmost preference to these two primary concern of mine I will choose Subchapter S corporation. From this chart we can easily analyse why S corporation will be best for my dream project. Here capital requirement canbe fulfilled by issuing stocks and bonds, bank can also give loan adequetly to this form of organization.Other major positive points for S corporation as my dream project are it will have perpetuity and double taxation can be available. These two features are not available in other forms of organization.Liability is also a major concern for me and while project cost is such high my own liability should be minimum.

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