Able and Baker desire to combine their mutual assets inorder to go into the trucking
business. Able has three (3) trucks worth $50,000. Bakeris willing to pay $50,000 cash.
They each would like to own and control 50% of thebusiness. Also, there is Gary who
wished to invest in the business but only the sum of$2,500. Gary only wants to be
exposed for the loss of his $2,500. Able and Bakercannot decide the form in which they
should operate their business and also they areundecided as to what form to use if Gary
is to participate.
A. If Able and Baker operate without Gary, what forms oforganizations are
available to them and explain the advantages anddisadvantages of each form.
B. Assume the above business is in New Jersey, whatforms of organizations are
available to them if they wish to take Gary into thebusiness on his terms.
