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Business Law Memo

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M E M O R A N D U M

TO:Client
FROM:
DATE:November 16, 2011
RE:Suggestive Business Entity for Cure of Cancer

Question Presented
What business entity would be best suited in order to create the enterprise for the client’s scientific cure of cancer, while keeping his main interests in mind: to get assistance in running the business portion of the enterprise, while limiting his personal liability; and providing investors with the most profit possible while limiting the scope of the amount of how many people that will eventually be involved?

Brief Answer

A C Corporation will likely suit the needs of the clients’ interest in creating his business enterprise of creating the cure for cancer.

Facts

Based on the information provided by the client, he wants to manage the scientific aspect of the business and hire business professionals to run the enterprise and raise additional funds. In addition, he wants to limit his liability in the enterprise and wants to limit the scope of how many investors would be involved.

Discussion

Based on my interpretation of the clients’ interest, he wants to hire another business professional to handle the business side. Because of this, C Corporation would be most beneficial. If the client brought on his main investors as limited partners and then they ended up making significant management decisions while he developed the science, they would be treated as general partners for liability reasons. Also, the client did not say exactly that he did not want investors to be liable, only limit the scope of how many people would be involved, he did say that he wanted to limit his personal liability. Therefore, C Corporation would be most beneficial because the client and his investors would have limited liability.

In the alternative, an LLC could be a possibility if the client wanted to take part in running the business aspect of the enterprise, then this would be the best. The client and the...

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