Marge, Jerry, and Steve decide to start a business together. They plan to run a gym, in a large rented facility. The gym will be on 4 floors of a building, with elevators running on each floor. The top floor will have all of the cardio machines – with floor to ceiling windows so the patrons can see out over San Diego while running, biking, stepping, or using the ellipticals. The third floor is the weight training room, and has free weights, Universal styled weights, and no windows. The second floor has classes – including dance, martial arts, kick-boxing, and yoga. The first floor has a day-care center for children aged 2-12 (potty trained required); a healthy snack bar with smoothies and health foods, and the main entrance where members sign in or sign up to join. The three owners have known each other for about 4 years, and each agree to put $75,000 into the business (each), and plan to share all profits. Marge has a CPA and also teaches yoga and aerobics; Jerry is a former runner up for Mr. Body Man and plans to offer personal training; and Steve plans to be the day-to-day operator/manager of the facility. They intend to hire at least 12 part or full-time employees to start.
Click "write submission" and answer these questions:
1. What type of business entity would you recommend Marge, Jerry, and Steve use to open their business? Provide the type you recommend, and explain why.
2. What steps will they need to take to form their business?
3. Provide a name for their business that is valid with the form of business you recommended.
4. How will each owner be taxed, based on the form you chose?