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Businesses are created in one of several organizational structures or forms.

Businesses are created in one of several organizational structures or forms..

Background Facts You Need To Know:  Connor, Ali, Madison, and Sam recognize an essential early step in creating Clean-N-Shine (‘Clean”) is to agree on a business organizational form and clarify the owners’  roles because each has different priorities, interests, and expectations about the business.

Businesses are created in one of several organizational structures or forms.  Choosing a business structure involves several factors, including which structure is most favorable for the company and its owners.

The goal for Clean is to minimize legal risks and liabilities, as well as tax liabilities, for the owners and the business.  The owners understand a business organizational structure can achieve this goal and can define their managerial roles and responsibilities clearly to satisfy their interests and maximize their areas of expertise.

Connor, Ali, Madison, and Sam agree that weighing and balancing advantages and disadvantages for the company and its owners is the heart of the process of choosing a business structure.   The owners have met privately to discuss their decision.   They are now ready to meet with TLG for further analysis, negotiation, and a decision regarding the Clean business structure.

Instructions

To assist in this process, Winnie and Ralph asked you to assess several business structures and their characteristics advantages and disadvantages for Clean.  Those structures are:

  • General Partnership
  • Limited Partnership
  • Limited Liability Partnership
  • General Corporation
  • Limited Liability Company

Evaluate and synthesize this information, and do the following two things:

1.  Chart You Need to Prepare:  Create a comparison matrix that shows the five types of business structures and compares and contrasts each type of business structure. 

You may use the chart format in the hyperlink above, or create a similar chart, or create an excel chart.

The chart should include several areas for comparison, i.e., the procedure for formation, cost of formation, etc.  The chart should consist of various types of liability for comparison.

The chart should be an in-depth and comprehensive comparison.

Ensure the pros and cons of each organizational structure are easily and compared in the chart.

PLEASE PUT INTEXT CITATIONS ON THE MATRIX CHART AS APPROPRIATE.   Any resources used in the matrix chart will also be listed in References.
2.  Report You Need to Prepare:  Write a report to Clean owners:

A.  recommending a business structure for Clean that best minimizes tax and personal liability for the new business and its owners

B.  explaining and justifying your recommendation, specifically and in detail.

Tips for Formatting Report: The report should use the following format

Report

TO:                Winnie James, Ralph Anders

FROM:            (your name)

RE:                  Clean Business Structure

DATE:       

1.

2.

Businesses are created in one of several organizational structures or forms.

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