Reference no: EM131666094

Jose Rivera is a real estate entrepreneur. Earlier in his professional life, Jose was a successful executive with Mattel but he resigned in a desire to pursue other opportunities that would allow him to be his own boss. Jose splits his time between a residence in Manhattan and a vacation cottage in the Hamptons. Jose and his eldest son, Jorge, own and manage several large apartment buildings in Queens, and this latter operation has been so successful that the family has been able to purchase a 40-foot yacht, which is moored near their summer home. Jose's two younger children are enrolled in private schools and Jose plans to send them to exclusive and expensive private colleges, similar to the one their brother Jorge attended. Jose has numerous investments in addition to the real estate properties, which when the time is right, can be quickly converted into cash for college expenses.

Despite his real estate success, Jose has long desired to get back into the toy business and is now in the process of purchasing Toy Builder, a small establishment that manufactures electronic toy components for a large, nationally known manufacturer of toys and electronic games. Jose looks forward to adding Toy Builder to his assets, as he hopes to utilize some of his prior Mattel experience to make the company even more successful. The small Toy Builder factory is located in New Jersey and utilizes machinery that is highly specialized. New employees receive an orientation from the human resource department, as well as training in manufacturing processes and safety regulations.

Which form of ownership should Jose select for Toy Builder (e.g. sole proprietorship, partnership, corporation or variations thereof) and why?