A&B (two individuals) wants to organize an entity to combine their two businesses. Assume the business will average $1 million of taxable income from the combined businesses. What entity would you advise your client to form? Please include in your discussion a compare and contrast of the different forms of business regimes including a discussion of a corporation, an S corporation, partnership and a limited liability company. Also, include in your discussion the different tax consequences between the different types of entities including which of these regimes requires the business entity to pay tax on the income earned and which of these regimes requires the entity owners to pay tax on the income earned by the entity.

Discuss the short term vs. long term benefits / detriments of each form of business regime.