Business Formation

Business Formation

Business Formation

Business Formation: Rich, Donna and Timmy are personal trainers have a business idea, but they are unaware of what type of business to form, and the appropriate financing approach to apply. Therefore, the paper shall be discussing some of the benefits and costs of partnerships and corporations and recommend the best option.

It shall also be differentiating between equity and debt financing as well as recommending the best approach of financing by looking at the impact it may have on the future of the partners and the net income.

………………………………Middle of paper……………………………….

The dividends payable represents the company’s net income after the debt financing interest has been repaid and the tax has been deducted. The company gets to retain a higher amount since there are no many shareholders unlike in equity where it would have to be distributed over the many shareholders.

References
Pride, W. M., Hughes, R. J., & Kapoor, J. R. (2012). Business. Mason, OH: South-Western Cengage Learning.
Terjesen, S., & Frederick, H. H. (2006). Sources of funding for Australia’s entrepreneurs. S.l.: Lulu.com.

 

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  • Length: 585 Words (2)
  • Rating:Better Essays
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