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George, Kim, and Martha have decided to open a Polynesian restaurant that specializes in Asian food and tropical drinks. George has no personal savings; however, he has a bartender’s license as well as seven years of experience as an assistant manager at a large restaurant. Kim recently inherited a large sum of money and is interested in investing some of it in a business opportunity. However, as a full-time medical student, Kim has neither the time nor the desire to operate the business. Martha has personal savings of almost $20,000 and is willing to invest some of it in the restaurant. However, she also wants to set some money aside for her son’s future college expenses. She plans on working full-time with George as co-manager of the restaurant. George, Kim, and Martha are now trying to decide which form of business organization they should select for the restaurant.
1) Which form of business will be easiest for them to organize? Explain.
2) Which form of business will provide the greatest protection for Kim’s and Martha’s uncommitted savings? Explain.
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