Print Сite this

S-Corp Limitations for Graeter’s

Graeter’s has established a flourishing business in its target setting, attracting as many audiences with as much diversity as possible. However, having reached the current success rate, the company might want to consider expanding or, at the very least, changing its status to a corporation. However, accepting the title of an S-corporation will imply dealing with certain limitations, such as the limitations of stock ownerships and a substantial loss of flexibility in managing finances. Namely, in an S-corporation, an owner is expected to have a single class of stock, which may create additional impediments to Graeter’s development.

We will write a
custom essay
specifically for you

for only $16.05 $11/page
308 certified writers online
Learn More

C- Corp Limitations for Graeter’s

A C-corporation implies quite a several challenges to address, even though some alterations imply minor advantages. By choosing to transfer to the setting of a C-corporation, Graeter’s will have a broader range of options for protection against creditors’ claims (Szycher, 2018). However, the specified benefit comes at a significant cost of a massive tax on the distribution. Specifically, owners of C-corporations are expected to pay a personal income tax. For Graeter, the specified change is quite undesirable given the restrictions under which the company is operating, namely, the limited amount of product that it can supply. Since Graeter has sacrificed quantity for quality, it needs to select the environments in which it can uphold the specified standard.

Strategic Alliance Opportunities

Another option that Graeter’s can consider presently, a strategic alliance offers quite a range of opportunities for the company to expand. Namely, a strategic alliance offers an opportunity to reduce costs by splitting them with the partner (Szycher, 2018). Moreover, a chance to collaborate with organizations that used to be Graeter’s rivals is introduced with the acceptance of the strategic alliance option. However, the specified choice will also entail a significant loss of control over the management and production processes (Szycher, 2018). The described outcome will imply that Graeter’s may have to share its production secrets with rivals, which will cost the company its competitive advantage.

Reference

Szycher, M. (2018). Szycher’s practical handbook of entrepreneurship and innovation. CRC Press.

Cite this paper

Select style

Reference

StudyCorgi. (2022, January 26). S-Corp Limitations for Graeter’s. Retrieved from https://studycorgi.com/s-corp-limitations-for-graeters/

Reference

StudyCorgi. (2022, January 26). S-Corp Limitations for Graeter’s. https://studycorgi.com/s-corp-limitations-for-graeters/

Work Cited

"S-Corp Limitations for Graeter’s." StudyCorgi, 26 Jan. 2022, studycorgi.com/s-corp-limitations-for-graeters/.

* Hyperlink the URL after pasting it to your document

1. StudyCorgi. "S-Corp Limitations for Graeter’s." January 26, 2022. https://studycorgi.com/s-corp-limitations-for-graeters/.


Bibliography


StudyCorgi. "S-Corp Limitations for Graeter’s." January 26, 2022. https://studycorgi.com/s-corp-limitations-for-graeters/.

References

StudyCorgi. 2022. "S-Corp Limitations for Graeter’s." January 26, 2022. https://studycorgi.com/s-corp-limitations-for-graeters/.

References

StudyCorgi. (2022) 'S-Corp Limitations for Graeter’s'. 26 January.

This paper was written and submitted to our database by a student to assist your with your own studies. You are free to use it to write your own assignment, however you must reference it properly.

If you are the original creator of this paper and no longer wish to have it published on StudyCorgi, request the removal.