Carrie Carson: Carrie is a 60-year-old tai chi instructor living in Santa Fe, New Mexico. For many years, she practiced in Hollywood, and because of an acting background, she developed a clientele including many celebrities. About five years ago, when her husband died, she moved to Santa Fe to escape life in the fast lane, and many of her celebrity clients still see her on a regular basis. The celebrities rave about Carrie and her techniques and endorse her for free. At the encouragement of her celebrity friends, Carrie has developed a unique set of products that she would like to market, but she readily admits she has no marketing expertise.
David Duncan: Dave is a 50-year-old marketing expert. He started his marketing career in the home office of a major chain of brick-and-mortar stores 25 years ago; over the years, he expanded his role within that company to include management of internet marketing operations. He retired two years ago when that company was acquired, and he moved to Santa Fe with his children. As a result of the acquisition, Dave received a large severance package. He became a client of Carrie a year ago. They have become good friends and look forward to working together. Dave is divorced and has two dependent children, one in college in Boston and the other in high school in Santa Fe.
Naomi Nelson: Naomi is the 30-year-old manager of an auto parts warehouse in Santa Fe. She enjoys her job but has gone as far as she can with that company. Naomi is looking for an opportunity with a startup company and got to know Carrie through mutual friends. Naomi is single and has no children.
Andrew Anderson: Andy is a 65-year-old recently retired airline pilot. Andy has been a lifelong fan of yoga and tai chi and has been going to Carrie’s classes almost since the day Carrie moved to Santa Fe. Andy and his wife have always been prudent managers of their money, and they have a substantial net worth. Andy receives military and airline pension income, plus his wife is a successful veterinarian and continues to practice. Andy and his wife are interested in investing cash to help Carrie’s business expand rapidly, and Andy would like to work at least part time for the business. Andy and his wife have three grown children that are independent.
Carrie is presently operating as a proprietorship grossing $200,000 a year and netting $100,000 a year after expenses. She has designed her line of clothing and other wearable gear, plus DVDs and other products suitable for meditation, practicing tai chi, and similar activities. She has obtained copyright protection for her creative work to the extent allowed by law.
Carrie does not have any inventory at the present time but plans to acquire inventory and begin marketing and selling her products shortly after forming the new entity. Carrie does not plan to manufacture her products. She will contract that activity out to manufacturing companies recommended by her celebrity friends experienced in the marketing of their own personal lines. In addition, one of Carrie’s closest friend’s business managers has agreed to offer his services as a consultant to help Dave adapt his skill set to marketing Carrie’s line of products.
Dave has mapped out a business plan calling for modest sales and no or little profit in the first year, but once things catch on, he projects considerable growth and profit potential as follows:
Year Sales Net Income
1 $1 million None
2 $5 million $500,000
3 $15 million $2 million
4 $30 million $5 million
5 $50 million $10 million
Carrie, Dave, Naomi, and Andy all plan to become owners of the business in the following ownership percentages, but they are open to your suggestions:
• Carrie, 50%
• Dave, 20%
• Naomi, 5%
• Andy, 25%
Carrie will be contributing her designs, good will, and contacts willing to endorse her products for free.
Dave and Naomi will be contributing their hard work and expertise.
Andy will be contributing $500,000 to cover the cost of inventory and initial marketing and other operating expenses.
Because the products will be marketed to customers in connection with a physical activity, all four future owners are concerned about potential product and other liability and want to make sure the choice of business entity protects them from personal liability should an adverse event result from product use.
They plan to name the business Tai-Ga.
The Tai-Ga organizers (hereafter, “the Organizers”) want your professional advice regarding whether they should form a partnership, an S corporation, a C corporation, or some other type of business entity.
First Meeting: In the first meeting, you are tasked with preparing a memorandum to the Organizers recommending a type of business entity and how it should be capitalized. The form that you recommend for Tai-Ga will be based on the tax and liability concerns communicated to you by the Organizers. In your memorandum, you will address those concerns by discussing the tax and limited liability effects of the different entity options available to the Organizers, and you will recommend what you feel is their best choice based on that discussion. Assume that the organizers are concerned about minimizing their total tax impact (the sum of the personal and entity tax cost) but even more concerned about minimizing personal liability. ATTACHED (WORKING PAPER)
Second Meeting: The second meeting is about two weeks after the first meeting. The Tai-Ga owners have completed all the legal steps necessary to set up the new business using the entity form that you recommended during the first meeting. In the second meeting, you will explain the tax elections and other accounting matters that must be considered prior to commencing operations. You will discuss the options available to the Organizers and make specific recommendations. ATTACHED (WORKING PAPER)
Third Meeting: The third meeting will be five years after the first two meetings. The business has been successful and Dave’s business projections have been substantially met. Based on a net income multiplier of 10:1, TaiGa is now worth $100 million. Andy has become seriously ill and wants to sell his stock and withdraw from the business. Two persons have expressed interest in buying Andy’s stock, but issuing new stock is also a possibility. One person is the company’s CFO, Brian Bolton. Brian came on board about six months after Tai-Ga commenced operations and has been instrumental in managing the financial aspects of the company’s explosive growth. Brian has expressed interest in acquiring up to 2% ownership in Tai-Ga via compensatory stock options. The other investor is Acme Manufacturing, one of Tai-Ga’s major suppliers: They wish to acquire up to 10% ownership. They require your input on the best way to approach the restructuring.
Over the last five years, Tai-Ga’s total net income has amounted to $17.5 million after reasonable salaries were paid out to the owners over the years. Of that $17.5 million, $5 million has been invested in inventory and other operating assets. The remainder ($12.5 million) is in cash. The owners have expressed interest in distributing $2 million of the cash in some fashion, and they want you to consider that in your memo. The remainder of the cash will be retained in the business to fund future growth.
Additionally, in light of Andy’s situation, the existing stakeholders would like you to research estate planning for their situations and prepare a memorandum outlining your recommendations for each member.
A. Analyze a client scenario to determine appropriate factors in estate planning for maximizing the tax benefit of the stakeholder. LABEL: FACTORS IN ESTATE PLANNING B. Formulate a recommendation to the client based on research of IRS and other resources. PLEASE LABEL: RECOMMENDATION C. Interpret research of IRS and other resources to determine relevance to all other stakeholder scenarios. PLEASE LABEL: RESEARCH D. Determine the appropriate information to advise each of the stakeholders, then communicate the impact of research results by composing a brief recommendation memorandum to the stakeholders.
353 Downloads | 13 Pages 3,112 Words | Published Date: 28/01/2015 Presentation With the expansion improvement in the field of innovation, it has been viewed as basic by the organizations to actualize such innovation in their business forms. Further, the expanding request from the clients with respect to the better nature of items and administrations conveyed to their doorstep has additionally required for the organizations to execute the e-business procedure in their business forms. E-business which is normally known as electronic business suggests the utilization of data correspondence and innovation in the business forms, to support different business exercises embraced by the association. E-business does not just mean purchasing and offering by means of inteet, rather it is a significantly more extensive idea and requires the incorporation of business exercises with the inteet and related advancements so the business exercises can be performed in a prevalent way. In straightforward words, it infers advancement of better approaches for working together by inventively abusing the different parts of the data correspondence and innovation. With the changing business condition, business associations are constrained to grow new methodologies and plans of action to stay aggressive. The coordination of business exercises with the most recent improvement in the field of innovation empowers the association to serve its client in an entirely unexpected way in contrast with the customary technique for business. It helps the organizations in the accomplishment of upper hand over others by giving them the chance to meet the client needs in a more compelling way. Alongside the favorable position that is experienced by the organizations from the quick improvement in the field of innovation, there are sure issues that have additionally risen up out of the e-business arrangements, for example, security related issues, protection, administrative, lawful and moral issues too. In that capacity the joining of the business exercises with the data innovation ought to be finished with extraordinary care keeping in mind the end goal to accomplish greatest preferred standpoint out of it (Li 2007). This report is essentially conceed with the improvement of an inteet showcasing plan for River Island, a form cognizant chain of retail locations. The present site of the organization is fundamental and does not bolster the internet business exchanges. All things considered, the report is fundamentally conceed with the advancement of an inteet showcasing plan, which will cover different subjects, for example, the effect of e-business procedure on the business, methodologies for actualizing the inteet advertising design, measures for the insurance of business for limiting the security related hazard and furthermore the future improvements in the field of e-business. At last the report closes with a conclusion and the suggestions on different parts of e-business technique. Effect of E-Business system on Business In this focused period, the fruitful execution of e-business procedure can lead an association to accomplish upper hand over others. E-business is a standout amongst the most vital routes for the organizations to use the new market openings. E-business prompts the change of whole business forms, as it not just considers the reengineering of the current business forms, rather it likewise helps in outlining and growing better approaches for performing different business forms. The conventional method for working together extending from the sourcing of crude materials and growing new items to getting HR and overseeing client relationship has completely been changed with the advancement in the field of innovation. E-business encourages the foundation of constant association with different elements, for example, merchants, wholesalers, providers, coordinations suppliers, specialist co-ops and the end customers. A compelling e-business technique would empower the association to accomplish proficiency in all the real capacities performed by the association with its different business substances. Along these lines, e-business can be a powerful apparatus for the organizations in advancing the stream of physical things between the supply chains, in interfacing with the end purchasers and furthermore in playing out the customary elements of business in an absolutely new manner (Gottschalk 2006). Desire of Inteet Customers: The accomplishment of each business relies on how well it can fulfill its clients. Consumer loyalty is the prime conce for the organizations nowadays, as they understand that drawing in new client would cost them too high in contrast with holding existing clients. All things considered, a large portion of the organizations are peering toward to fulfill their current clients by offering them items and administrations over their desires. Be that as it may, the headway in the field of innovation has additionally raised their desire much more than previously. In the e-business age, the desire of the clients has completely been changed with that of the customary business. Clients are expecting more elevated amount of administrations, for example, opportune conveyance of items and administrations with the right highlights as specified amid the season of procurement. The exchange ought to be free from any sort of misrepresentation and the handling time ought to likewise be slightest. They expect customized and also mistake free administration through numerous channels and furthermore the accessibility of administration at all the circumstances (E-Business 2010). Notwithstanding every one of these desires, the clients are additionally particularly conce as for the security and secrecy related issues from the e-business exchange. Further, as the River Island is a mold cognizant chain of retail location, the clients would expect great nature of items with auspicious conveyance since it would not be workable for them to judge the nature of the items electronically. All things considered the desire of the clients would additionally increment contingent on the idea of the business. Combination with the Existing business forms: To achieve the most extreme favorable position of e-business procedure, it turns out to be especially fundamental that the new business forms must be incorporated with the current business forms. However if there should be an occurrence of River Island, the site of the organization does not bolster the web based business exchange. In that capacity, it has been a troublesome errand to incorporate the information with the current business framework database of the association. The effective dispatch of an e-business would require the incorporation of center business application programming with that of the e-business applications. This will help in the entire acknowledgment of advantages from e-business. Examination of Logistics Processes: As the desire of the client is high if there should be an occurrence of e-business, it ends up fundamental for the organizations to satisfy their desire successfully. The client as a rule expects the conveyance of items and administrations at insignificant time. With a specific end goal to meet out this desire, it ends up fundamental for the organizations to have a powerful strategic framework in task, so speedier administrations can be guaranteed. In the event of River Island, as the association is intending to incorporate its capacity with e-business, the coordinations arrangement of the association ought to be to such an extent that it guarantees opportune conveyance of items and administrations. At exhibit, the coordinations procedure of the association is dealt with by an organization known as Zendor, which gives the fundamental center administrations like conveyance, warehousing, call focuses and retumanagement. Notwithstanding, the mix of the business with the inte et would require the calculated framework to be more viable, as the database of the client would grow which requires the business to react rapidly to its client's prerequisites (Parazoglou 2006). Assets required for Website upkeep and support: The Website of River Island is fundamental and does not bolster the web based business exchange. Further, the organization is likewise intending to showcase its items and administrations through inteet which requires a successful site that backings the online business exchange. All things considered it winds up basic for the business to roll out improvements to its current site, with the goal that the organization can extend its activity by moving toward bigger market territory. The progressions to the current site with a specific end goal to help the internet business exchange would require different assets, for example, a group of specialized staff, who cares for the whole outline and the advancement of the site, site venture administrators to care for the essential upgrades required keeping in mind the end goal to shield it from being obsolete. What's more, adequate assets would likewise be required with the goal that the upkeep procedure can be directed in a more proficient way (Montgomery 2009). Execution Strategy An appropriate arranging is particularly basic for incorporating the matter of River Island with the data innovation. A very much surrounded methodology should be taken after conceing the improvement of site to its outline, with the goal that it would be best in drawing in the focal point of the clients. Further, the system ought to likewise represent the advertising and advancement technique together with the administration of store network movement keeping in mind the end goal to fulfill the need of the client in a most effective way. A legitimate arranging would guarantee what precisely is expected to address in the site with the goal that it would stay successful. It turns out to be particularly basic for the retail fasten store to reengineer its strategic exercises to accomplish a fruitful usage of the web based business. The usage of all the significant undertakings required for the improvement of site ought to be performed in way that outcomes into the accomplishment of general achievement. Anticipating Website planning: A standout amongst the most vital perspectives for the accomplishment of a site relies on the outline of the site. It ought to incorporate everything that a client anticipates from a site. In the event of River Island, the site ought to be des>GET ANSWER