Wave -- Business Entity Type Discussion
Read the scenario set out below and discuss the questions that follow it:
Art Fleming is a design engineer with a proven track record in the field of electronic musical instruments. He recently designed a new VLSI (very large scale integrated) chip. This chip is meant to be the heart and soul of a digital sampling keyboard to be called WAVE. Fleming believes the WAVE will set a new industry standard. He wishes to organize a business enterprise to build and market it. He has a meeting with his lawyer and conveys to her the following bits of information:
It will take approximately 2 years to turn the VLSI chip into a marketable product
Given that is true he will have to live on something….whether it be the savings or something else. There obviously wouldn't be any WAVE revenue coming in. He's have to live on income from other ventures or his savings. Also, this would preclude him from doing S-Corp since even owners are paid W-2 wages. This would probably point to a C-Corp/LLC…but we shall continue.
b. Fleming has more than $200,000 in savings from previous ventures. He does not want any of that...
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