TO INCORPORATE OR NOT TO INCORPORATE

Thomas O'Grady and Bryan Rossisky have decided to start a small business buying flowers, shrubs, and trees whole-sale and reselling them to the general public. They plan to contribute $5,000 each in startup capital and lease a 2.5-acre tract of land with a small, portable sales office.

Thomas and Bryan are trying to decide what form of organization would be appropriate. Bryan thinks they should create a corporation because they would have limited liability and the image of a large organization. Thomas thinks a partnership would be easier to start and would allow them to rely on the combination of their talents and financial resources. In addition, there might be fewer reports and regulatory controls to cope with.

1			Discussion Questions What are some of the advantages and disadvantages of Thomas and Bryan forming a corporation?
2			What are the advantages and disadvantages of their forming a partnership?
3			Which organizational form do you think would be best for Thomas and Bryan's company and why?