Question

Scenario 2
You are an entrepreneur. You and a friend develop a new design for in-line skates that improves speed by 25% to 30%. You plan to form a business to manufacture and market the skates. You and your friend want to minimize taxes, but your prime concern is potential lawsuits from individuals who might be injured on these skates.

What form of organization do you set up? Explain

Describe the ethical aspects you considered to select this form of organization

Explain the ethical consequences if you selected the other forms of organization

(There are three forms of organization you could select from, so explain the ethical ramifications for the other two forms of organization you did not select).

Answer 1

Answer

Note - Not considering the country in which the business is being set up

I would be choosing "Limited Liability Partnership" form of organisation as that will minimize the risk of potential lawsuits as well as taxations

The other two forms are:-

Partnership - I would not choose this form of organisation as the liability for the partners are unlimited here hence it will maximize the risk of potential lawsuits.

Private Limited Company - I would not choose this form of organisation as the tax rate for this form of organisations are higher than the rest.