OACETT Internationally Educated Professional Practice Exam IEPPE Question # 35 Topic 4 Discussion

OACETT Internationally Educated Professional Practice Exam IEPPE Question # 35 Topic 4 Discussion

IEPPE Exam Topic 4 Question 35 Discussion:
Question #: 35
Topic #: 4

Brown and Green have a concept for a new survey measuring instrument based on their many years in the Civil Survey field. They want to establish a business to raise capital, design, manufacture, and market this new instrument. Both Brown and Green are well established, are in their mid-50s, and have no family members who would be prepared to take over the business when they are ready to retire in about 10 years.

In your opinion, is there justification for starting up with one business form and converting to another form later?


A.

Yes, there is justification for starting up with one business and converting to another form because it provides the owners with interesting variety.


B.

No, there is no justification for starting up with one business form and converting to another form because it is too expensive.


C.

Yes, starting out as a partnership might be the easiest/cheapest way to get the business started and it could be switched to a corporation for liability protection and tax advantages when growth begins.


D.

No, it is bad business practice to change the form in which a business is being operated as it creates confusion among clients and suppliers.


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