• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Entity Selection Exercise - Elements of Business Formation

Extracts from this document...

Introduction

Entity Selection Exercise Elements of Business Formation Maria Cristina Medina University of Phoenix Law/529 -Legal Environment of Business Atty. William Davis July 18, 2005 Introduction Five friends are planning to form a commercial construction business, but with the combined savings they do not have enough assets to start their business. The group came up with a plan of either to obtain bank financing which require them to put collateral; or outside investors who will demand control with no personal collateral. Idea and Vision for the Business It is apparent that if they start up their commercial construction business, they would definitely succeed since majority from those five friends had worked closely with successful homebuilders while one headed the local division of national construction with two years of experience. Although only two of them have experience in running companies and have sizable assets, there is always an alternative to gain their source of capital. However, before they think of financing they should begin writing a business plan, which is a good idea for lenders to oversee how your investment will do in the market. ...read more.

Middle

These are the following: 1. Difficulty and cost associated for business creation. As we all know, it is very crucial and it takes a lot of time to complete creation of a particular organization. For that reason, it is essential to review all legal entities and the cost associated in order to make decision that would suit the most for commercial construction business. 2. Transfer of ownership. This is another factor to consider when selecting organizational form for a business. They need to evaluate what obligations owners might have after business dissolution. 3. How to Control decision making in business. Since five friends are going to start the construction business, it would be very hard to make collective decision because of their different points of views. This is the reason why control of making decision is important; to correct approaches in resolving conflict situations in identifying prior opening of a new business. . 4. Personal liability should be chosen for commercial construction. With the group situation, there are two alternatives available: the bank financing and Outside Investment. We all know that business involves money as the major requirement to start a business. ...read more.

Conclusion

These would allow all partners to share control and participate equally in management. Profits and losses are divided among partners in any manner they choose. General Partnership is the best choice since they have management control, and with careful analysis it is obvious that they can also have big financial interest in the company. Conclusion I therefore recommend, S Corporation as the best choice in starting business construction. This is because five friends have different amount of money to invest that would have the flexibility to divide ownership into multiple unequal shares. It would also allow investors together and obtain needed capital for investment, which will reduce bank financing of construction business. I can also say that, three of these friends who worked with successful homebuilders, wherein one of them headed the local division of national construction with two years experience will be able to control managerial decision-making process: shareholders, directors, officers. These three people cannot be held responsible for the debts and obligation of the corporation but only to the amount of their investments. Another key factor is the transfer of ownership, which is easily done by the sale of stock in S Corporation. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level ICT in Business section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level ICT in Business essays

  1. REPORT ON THE BUSINESS OF MARKS & SPENCER

    seek to move forward in relation to ensuring quality, even if they are to remain at their current level of achievement. 17.4 ISO 9000 ISO 9000 is another quality system method witch is important to Marks and Spencer. This service is a reliable supplier of goods and services to use.

  2. Describe the key elements of research methodology

    They can often provide a useful starting point and may contain links to other useful sources. A disadvantage of magazines is that they may not have enough academic rigour to be the only secondary source. This is why they need to be used alongside other sources.

  1. Apple Incorporation - Case Analysis

    What does this have to do with computers? The people involved in the development of the Macintosh were artists rather than engineers. They inscribed their names on the inside of the machines much like an artist would his/her painting. In 1988, Apple began its 'Think different' campaign and it signified what Apple people were about.

  2. What Do You Understand By The Term 'Intelligence' & What Are Its Major Elements? ...

    of the President/Prime Minister, the Department of Defense, and Treasury, or other consumers. In some cases, the requests and requirements become institutionalized. Thus, the President/Prime Minister does not need to remind the intelligence community to collect information on nuclear proliferation.

  1. Business Idea

    What is your favourite rugby team? (If applicable) Rugby is unlikely to take precedence over football due to it being shown at the same time normally, but when there is a game which doesn't clash with football or is more important, then Leicester Tigers will be shown, as they are

  2. E-commerce in Business Companies of Bangladesh.

    and Business-to-Government (B2G). B2C e-commerce is unlikely to be of much use in the near future in Bangladesh because of low per capita income, a weak infrastructural and legal environment, lack of trust between business and consumers. B2C for cross border trade is also limited by the factors suggested for the domestic front.

  1. Online Business

    There are many ways in which an online presence can attract customer's attention. For instance, to start with you would obviously need to make your website look attractive in terms of using bold colours that stand out etc. You would need to include all the basics on the website e.g.

  2. Business Venture - Dance Club

    Shareholders are often closely involved in running the business. Running business venture like nightclub witch is very risky business; I will big investment to start it. Banks and other finance houses are often happier to lend money to limited companies, which I will be for my business venture, but it also true that I will be sharing the profit with the shareholders and taking big decisions will take time.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work