Running head: ALTERNTIVE FORMS OF BUSINESS ORGANIZATION 1

Alternative Forms of Business Organizations

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ALTERNATIVE FORMS OF BUSINESS ORGANIZATION 2

To: Andy Taylor and Floyd Barber

From: Grant Thornton Accounting and Taxation Firm

Date: November 31, 2019

Re: Alternative Forms of Business Organizations

Executive Summary

In this memo, we are going to analyze different forms of business organization and

recommend the best form of organization that should be adopted by Andy Taylor and Floyd

Barber to start the bicycles selling business. After reviewing different forms of business

organization we recommend that Andy Taylor and Floyd Barber embrace partnership due to the

following reasons; the resources required by the partnership are easy to gather compared to other

forms of business, the two partners have the skills and assets required to set up a partnership

business; Andy has experience in selling the bicycles while Floyd own a building that can house

the business. Lastly, the two will offer different skills to the business hence improving their

profitability.

If Andy Taylor and Floyd Barber adopt a partnership they will have to adopt to the

following asset and liability.

Assets Introduced by Floyd = Cash + Land (at market value) + Building (market value)

Assets Introduced by Andy = $15,000 + $15,000 + $80,000

Asset Introduced by Andy = $110,000

Liabilities Introduced by Floyd = $70,000

Liability Introduced by Andy =$70,000

Assets Liability basis for partnership $110,000 - $70,000 = $40,000.

ALTERNATIVE FORMS OF BUSINESS ORGANIZATION 3

Reference

Anderson, P. E., & Willis, A. B. (2018). Handbook of Partnership Taxation. California

Law Review, 46(2), 311. doi:10.2307/3478649