SEU Law Recommending a Business Entity Discussion

Case Study

Ahmad and his friend, A.G. Pennypacker, have come up with a great  idea: they have developed a fluoroelastomer liner (a rubber lining) for  oil tankers. With this innovation, they believe they can eliminate most  oil spills that result from tanker accidents. The liner is highly  resistant to fluctuations in temperature as well as physical punctures.

Ahmad wants to set up a company, but is unsure of his options and  has come to you for advice for the type of business entity formation he  should select. He has the following concerns:

He does not want his other business concerns being held liable should there be a lawsuit arising from use/sale of this product.

He wants an entity form that will minimize his tax liability.

1. Based on the entity forms detailed in Chapter 35, select one you  feel satisfies his concerns. Make sure to explain why it is the best for  Ahmad and Pennypacker.
2. Action Items