FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Three friends are starting a home painting business while they are in college. One of the friends is from a wealthy family and will finance the startup costs – website development, advertising and purchasing the paint, in return for a 50% share of the business. The other two friends will each own 25% of the business. They may have two or three employees who will be paid by the job and will not own any of the business. They expect to distribute to themselves all the earnings of the business every month. Once they graduate from college, they expect to leave the business and have their brothers and sisters take over. They have no plans to grow the business beyond one or two projects at a time.
Which form of ownership should they use as they start up this business?
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