LAW ISSUE IN BUSINESS:
1. You have decided to start a business that buys tax liens on real estate that are sold over the internet.You have approximately fifty thousand dollars of capital to invest, and for the purpose of this exercise, you may consider your overhead expenses to be zero.Your only expense will be in the acquisition of the liens.
You estimate your rate of return will be approximately nine percent on any capital invested in a lien; however, you will have on average a three year holding period before the lien is in place.You have all the necessary experience to buy, sell, and foreclose on these liens,You have previously written a wonderful prospectus detailing the potential investment, and people are interested in your company.
You have also satisfied any requirements you may have for filing, registering or other items related to selling interest in your business. You would like to pay yourself a salary of one hundred thousand dollars per year, and you would like to maintain control of your company.
Please write a short plan on how you plan to raise the necessary capital to finance your business, and how you will handle the management and control issues. You may presume that you have either formed an LLC or Corporation.
You do not need to account for tax consequences, but you should fully detail what you will do regarding membership/stock sales and what you will do for debt. Presume that all debt will carry ten percent interest.
2. Provide an example of a nationally known or local business for each of the following types of business organizations:
-Sole Proprietor
-Partnership
-Corporation
-Limited Liability Company