Below are three independent situations.

A. Larry, Ulysses, and Irene are three college student friends planning to set up a summer business at a nearby resort to sell T-shirts, souvenirs, and novelties to tourists. While they have no assets (to speak of) of their own, Larry’s uncle has agreed to finance them with upfront capital to acquire merchandise and so on. They plan to operate for only one summer, as all expect to graduate soon and take permanent jobs in a nearby state.

B. Molly and Vicky are twin sisters who have decided to start a computer software consulting firm. Molly is the “techie,” and a bit unreliable. Vicky is a highly successful manager gifted with organizational and business skills. Between the two, they believe they can attract and serve a profitable clientele. In fact, they envision rapid expansion of their practice and diversification into a variety of related business activities. Between them, they have only enough liquid capital to start a small operation.

C. Reginald and Ruth Ann are ne’er-do-well offspring of a deceased industrialist who left them each $400 million—most of which they still have. Ever the optimists, they think there is money to be made in the steel business. A friend they met at the country club has persuaded them to provide $10 million to set up a business that would manufacture and distribute a line of lightweight steel kites. Operations would be located in a nearby state.

Required

For each of the three independent situations, recommend the form of business organization that you believe would be most appropriate. Explain your reasoning in each case, both in favor of your selection and any reasons against your choice.