Case Study: Steiger Manufacturing

Improved Essays
Mr. Steiger,
I welcome the opportunity to consult you regarding your future business plans and hope to put your mind at ease over some of the concerns we previously spoke about with regard to the possibility of a change in the business organization and what that might entail.
Some of your main concerns as a business owner are in regards to the risk and liability that accompany a sole proprietorship. Some of those concerns were: the possibility of an increase in having a backlog of work and having to hire outside workers. Installation errors going wrong and causing an injury, licensed drivers getting into accidents, and workers becoming injured or injuring another while on the job. You are concerned over the liabilities that you may face
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Moreover, some ways to increase investiture into such an enterprise would require, as suggested taking on a shareholder, and addressing your concern over the effect it may have on liability. To have shareholders you would be forced to change to a business format to that would allow their existence. If you were to sell the business you would have to start from scratch and the new owner would choose the type of organization that he wants for the acquired business to be …show more content…
Each partner would pay taxes on their shares and the partnership can be terminated if the partners died unless otherwise stated in the agreement. In a Limited Partnership, you can have General and limited partners. The Limited partners contribute financially and are only liable for their investment, thus their personal assets are protected, but you as the general partner would be most liable as you would share control with other general managers. Limited partners receive profits instantly and are taxed once The continuity of a Limited Partnership is based on the general partner and the agreement set up. Corporations, on the other hand, are generally reserved for larger businesses and are more costly and heavily regulated. This form of business is run by a Board of Directors which contains shareholders and because the Business is a separate entity from the owner, the shareholders personal assets are secured and they are only personally liable, meaning that as a shareholder you would be protected from any debts that may befall the company. The number of shareholders would not affect the continuity of the organization which is ideal if you want to have a second factory elsewhere. In a C-Corporation, you would be taxed twice, once when the business files a tax return and then later on when the

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