Ripley, an individual; Jones, an individual; and Weyland Incorporated, a California corporation; are planning to enter into a joint venture together....

Ripley, an individual; Jones, an individual; and Weyland Incorporated, a California corporation; are planning to enter into a joint venture together. They would like this joint venture to be operated as a separate legal entity. They have come to you, a certified public accountant, in hopes that your firm would provide tax reporting services for this new venture. In addition, they would like to know your preference on the best form of entity to operate this new venture. Here are some of the items they would like you to consider in recommending a form of business entity:

• Ripley and Jones would like to have limited liability for joint venture activities.
• Weyland would like the legal entity to exist in perpetuity.
• Jones would like to minimize federal income tax for distribution of operating earnings to the owners.
• Ripley would like minimization of administrative burden.
• Ripley and Weyland may sell their ownership interests in 2 years.
• The new joint venture is expected to make losses during its first two years of operation.