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Homework answers / question archive / Determine what form of a business organization are the following: Information systems lecturers have formed a business to improve the speed of information transfer over the internet
Determine what form of a business organization are the following:
Information systems lecturers have formed a business to improve the speed of information transfer over the internet. Each has contributed an equal amount of cash and knowledge to the venture but has concerns about legal liabilities.
Robert and Tom each owned separate shoe manufacturing businesses. They have decided to merge but will need significant cash to expand the business.
In our first example, the Information Systems lecturers main concern is legal liability. To help mitigate the liability risks involved in forming a partnership, they should seek to create a Limited Liability Corporation (LLC). This type of organization has the characteristics of a partnership in which each participant has a defined share of ownership, but the liability of the corporation in which any legal issues may not fully affect each partner.
For our second example, forming a corporation would be the best option for Robert and Tom because of the much needed cash for their shoe business expansion. Robert and Tom can sell shares of stock of the company to raise the needed cash to fund their expansion.
