| Course | BUS 307 Business Law II |
|---|---|
| Module | Module 2 |
| Paper type | undergraduate assignment comparing business entities and recommending a structure |
| Length | About 1,000 words, 6 pages |
| Format | APA 7 student paper |
| School | Southern New Hampshire University |
| Program | BS Business Administration |
| Updated | October 2026 |
Free sample paper for BUS 307 Module 2
Choice of Entity Analysis for a Family Beekeeping Business
[Student Name]
Southern New Hampshire University
BUS 307: Business Law II
Module Two Assignment
[Instructor Name]
[Date]
The organization, setting and figures below are a composite written as a model document. No real employer, client, colleague or patient is described.
Choice of Entity Analysis for a Family Beekeeping Business
Introduction
The business has operated as a general partnership since the siblings' father retired in 2019, without a written partnership agreement. Its 6,000 hives, two semitrailers and honey extraction building are worth about $2.4 million, and revenue was about $3.2 million in 2025: about 55 percent from almond pollination fees and 45 percent from bulk honey sales. The three siblings share profits equally and make decisions together. An overturned semitrailer in Nebraska and one sibling's divorce have prompted them to reconsider how the business is organized. This paper compares four forms, recommends one, sets out the terms its governing document should contain and explains how to convert.
The Siblings' Goals
In conversations with their accountant and lawyer, the siblings named five goals. They want to protect their personal homes and savings from business liabilities. They want to avoid paying more tax than they do now. They want to keep making decisions together without formal meetings. They want clear rules for what happens if one of them divorces, dies or wants to leave. And they want to be able to pass the business to their children someday. They have no plans to bring in outside investors. These goals frame the comparison that follows.
Comparing the Forms
Business forms compared for the siblings
| Factor | General partnership | LLC | S corporation | C corporation |
|---|---|---|---|---|
| Owners' liability | Personal, joint and several | Limited to investment | Limited to investment | Limited to investment |
| Taxation | Pass-through | Pass-through by default | Pass-through by election | Entity tax plus tax on dividends |
| Management | Equal by default | Flexible by agreement | Board and officers | Board and officers |
| Ownership transfer | Needs consent | Set by agreement | Limited eligible shareholders | Freely transferable unless restricted |
| Formation and upkeep | None required | Articles, agreement, annual report | Incorporation, election, payroll for owners | Incorporation, corporate formalities |
| Raising outside capital | Difficult | Possible, less familiar to investors | Restricted | Easiest |
Liability
The partnership leaves each sibling personally liable for all partnership obligations, as the Nebraska accident made clear. The other three forms limit each owner's liability to what they have invested, though owners stay liable for their own wrongful acts and for any debts they personally guarantee. Mallor et al. (2022) note that limited liability also depends on owners maintaining the company as a separate entity; it is not automatic in practice.
Taxation
The partnership's profits pass through to the siblings' personal returns, and each pays self-employment tax on her share. A multi-member LLC is taxed the same way by default, so converting would not change the siblings' tax position (Internal Revenue Service, 2024). An S corporation also passes income through, and owners who take a reasonable salary pay employment taxes only on that salary rather than on all profits, which could save money; but it requires running payroll for the owners and limits who can own shares. A C corporation pays tax on its own profits, and dividends to the siblings would be taxed again, which makes no sense for a business that distributes most of its profit.
Management, Transfer and Succession
The siblings prefer equal, informal decision-making, which an LLC's operating agreement can provide without the board meetings and officer roles a corporation requires. Bainbridge (2015) describes the corporation's formal structure as an advantage for large businesses with many owners and a drawback for small, closely held ones. On transfer, the LLC agreement can restrict transfers to family members and require consent for anyone else, which serves the goal of passing the business to the next generation.
Recommendation
A member-managed LLC taxed as a partnership meets all five goals: limited liability, unchanged taxation, informal joint management, clear exit rules through the operating agreement and controlled transfer to family. The siblings could later elect S corporation tax treatment for the LLC if their accountant finds the payroll tax savings worth the added cost. A corporation would make sense only if the family later decided to sell a stake to outside investors, who generally prefer the familiar structure and share classes a corporation offers; converting then would be possible but would bring its own costs.
The Operating Agreement
The operating agreement is where most of the siblings' protection lies. It should state each member's equal share and capital contribution. It should give each member authority to sign routine contracts up to $25,000 but require all three to approve purchases above that, borrowing and the sale of hives in bulk. It should restrict transfers to family members, give the company and the other members the right to buy any interest offered elsewhere, and treat a divorce as a trigger for the company to buy the ex-spouse's economic interest at a set valuation, so a former spouse never becomes a member. It should set buyout terms on death, disability or a member's withdrawal, paid over five years so the business is not drained. And it should require distributions at least large enough to cover each member's taxes on her share of profits.
Converting and Keeping the Shield
North Dakota's statutes allow a partnership to convert to an LLC by filing articles of organization and a statement of conversion, after which the LLC holds the partnership's assets and obligations. The company should then retitle the trucks, update contracts and insurance, open new bank accounts and notify customers and the almond growers it contracts with. To keep the liability shield, the siblings must keep company money separate from personal money, sign contracts in the company's name, keep the company adequately insured and file annual reports. Courts are most likely to disregard an LLC when owners treat its accounts as their own. The siblings' habit of paying household bills from the partnership account occasionally will have to stop, and their accountant should set each of them up with regular distributions instead.
Conclusion
A member-managed LLC, taxed as a partnership and governed by a careful operating agreement, protects the siblings' personal assets without raising their taxes, keeps their informal way of running the business and settles the questions a divorce or death would raise. The conversion is simple; keeping the shield requires discipline.
References
Bainbridge, S. M. (2015). Corporate law (3rd ed.). Foundation Press.
Internal Revenue Service. (2024). Publication 3402: Taxation of limited liability companies. Author.
Mallor, J. P., Barnes, A. J., Bowers, L. T., & Langvardt, A. W. (2022). Business law: The ethical, global, and e-commerce environment (18th ed.). McGraw-Hill Education.
What the BUS 307 Module 2 instructions ask for
The Module Two assignment in BUS 307 asks you to analyze the forms of business organization available to a particular business and recommend the most suitable. You typically compare forms such as sole proprietorships, partnerships, limited liability companies and corporations on liability, taxation, management, ownership transfer, financing and formation requirements, then justify a choice. Strong submissions weigh these factors against the specific owners' goals and risks rather than listing them in a chart alone, address what the governing documents should say and explain the process and costs of forming or converting. They also note the owners' continuing obligations to preserve limited liability. Some versions also ask about the tax consequences of converting, which are usually minimal for a partnership becoming an LLC.
How this BUS 307 Module 2 business entities assignment example is built
The paper compares the four forms in a table and then in prose. A general partnership leaves each sibling personally liable; an LLC shields them and can be taxed as a partnership; an S corporation shields them and may reduce self-employment tax but limits ownership and requires salaries; a C corporation shields them but taxes profits twice. Because the siblings want liability protection, pass-through taxation and flexibility, and have no plans for outside investors, the paper recommends a member-managed LLC. It sets out operating agreement terms on transfers, divorce, death, buyouts, authority and distributions, explains conversion through North Dakota's statutes, and lists the practices that keep courts from disregarding the LLC.
Where the BUS 307 Module 2 rubric puts the points
The rubric for the entities paper commonly weighs the accuracy of each form's description, the analysis of factors against the business's needs, the justification of the recommendation, attention to governing documents and formation, and writing. Top papers apply each factor to the specific owners, explain tax differences correctly, address management and transfer issues that matter to a family business and recognize the formalities needed to keep limited liability. Papers lose credit for generic comparisons, for misstating how forms are taxed, for recommending a form without addressing its governing document and for ignoring conversion costs. A short list of the governing document's key provisions often lifts a paper from adequate to strong.
BUS 307 Module 2 help: the mistakes that cost points
The most common weakness in entity papers is a comparison chart followed by a one-line recommendation. Use the chart as a summary, then explain how each factor plays out for these owners. Be accurate about tax: an LLC is taxed as a partnership by default if it has more than one member, an S corporation is a tax election available to qualifying corporations and LLCs, and a C corporation pays tax at the entity level. Do not forget the governing document; for an LLC, the operating agreement is where most of the owners' real protection lies. Explain how the business will keep its affairs separate so the liability shield holds.
Get BUS 307 Module 2 written to your instructions
Pass along the BUS 307 Module 2 brief with the facts of your case. We compare entity forms on the factors that matter to your owners, recommend one with its governing terms and explain conversion. About two days; a first paper is free. The paper above is an original model document written by our desk, not a submitted student paper and not an official Southern New Hampshire University document.
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BUS 307 Module 2 questions, answered
Where can I find a free BUS 307 Module 2 Business Entities sample?
This page includes a complete BUS 307 Module 2 comparison of business forms for a family beekeeping business.
What factors matter in choosing a business entity?
Owners' personal liability, taxation, management structure, ease of transferring ownership, ability to raise capital, formation costs and ongoing formalities.
How is a multi-member LLC taxed?
By default as a partnership, so profits and losses pass through to members' personal returns, though it can elect to be taxed as a corporation.
What is an S corporation?
A corporation or eligible LLC that elects under the tax code to pass income through to its owners, subject to limits on the number and type of shareholders and one class of stock.
What is piercing the veil?
A court's decision to disregard a company's limited liability and hold owners personally liable, usually because they mixed personal and business affairs or used the company to commit fraud.