For each of the three independent situations below, indicate if you would recommend the partnership form of business organization. State your reasons for your recommendation.
1. Sarah, Alisha, and Connie just graduated from a two-year college program and would like to start a bookkeeping business called SAC Bookkeeping. They each have equivalent assets to bring to the business.
2. Philip Harcourt just joined the law practice of Osler and Hoskins. He thinks he will be making a huge salary and is worried about the tax effects of this income. He thinks the partners should incorporate the partnership and avoid the tax bill.
3. Fred Klaus and Felix Cadeau would like to form a construction company. Fred has the contacts, cash, and estimating skills, while Felix has equipment and field experience. There will be minimal profits until the business has a few projects.