You now understand Sally’s ambition, how she thinks, her quest for perfection, and her focused vision for future success. From your perspective, (1) what form of business do you believe is most suited for the immediate formation of the company, and if applicable, (2) do you perceive the need to change the original form you chose in your business plan to another form now or overtime? (3) Why, or why not? You have reviewed all aspects of becoming a legally recognized business. You understand the tax issues, the management structure options, raising operating capital, the various types of insurance coverage required, and the necessity of having the peace of mind in the event of a catastrophic moment. As a manager-owner, the concept of “piercing the corporate veil” gives you a sinking feeling when confronted with a questionable operating decision. (4) What steps can you take to avoid facing a situation that would cause a court to pierce the corporate veil of your business? You have a lot to debate in deciding the governance form Sally would prefer. (5) Would she prefer an LLC, S-Corp, or C-Corp, and why? (6) Discuss why you believe Sally would prefer one form of a company organization over another.
We know Sally successfully operated her own multimillion-dollar business, with sufficient business expertise without the benefit of a corporate board or shareholders. We know she fully funded her business and carries no debt that would impede this new venture. We know she has worked well with you as a team in the drive to start this enterprise. Carefully consider what form works best between the two of you in building this empire and why. What about the future? How do all the pieces fit looking forward? What topics must be included in the discussion before any expansion of the business takes place? Explain.
Sally has found several documents to help with picking which type of corporation to form for the business you are building with her. Feel free to use this information. She has shared them here:
Create a matrix charting the pro and cons and advantages and disadvantages for the following forms of company organizations:
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