After graduation, four college fraternity brothers decide theywant to form a business together. They want to open a sports bar onsome property that recently was put up for sale adjacent to thelocal stadium. The fraternity brothers are not yet sure whetherthey want to make equal investments and have equal control over thepartnership. However, each brother is able to invest a maximum of$20,000. The fraternity brothers are open to considering any of thedifferent forms of business organization frameworks available tothem.
Please correctly answer the questions below AND provide acomplete explanation for your answer.
1. Because there are multiple people interested in creating abusiness organization, the fraternity brothers cannot utilize whichtype of business organization?
2. Suppose the fraternity brothers are considering forming apartnership. What would be one major disadvantage of thisoption?
3. Suppose that the fraternity brothers decide they indeed wantto form a partnership. If all the partners agree that they want toshare the management responsibilities and profits equally andaccept equal personal liability, they should form a___________________.
4. Suppose that instead of a partnership, the brothers decide toconsider a corporation. What is an advantage of a corporation thatthey might find tempting?
5. What is one major disadvantage of a corporation that thefraternity brothers might face should they decide toincorporate?
6. Suppose the fraternity brothers want to combine the taxadvantages and management flexibility of a partnership with thelimited liability of a corporation. What type of businessorganization should they form?
7. Ultimately, the fraternity brothers decide to form a limitedliability company (LLC). Under this form of business organization,what is the magnitude of liability each member of the LLC wouldface?
