Allison is considering forming a new business entity to operate a short-term vacation rentals business. Her business plan is to borrow money from a small business lender to purchase beach rental property, and advertise weekly rentals on various websites such as AirBNB and VRBO. Customers of the business would rent the property, subject to a rental agreement, and Allison would be responsible for ensuring that the property was properly cleaned between tenants. Allison expects to generate around $100,000 her first year of operations.

Identify the potential issues that Allison may have in operating this business, and discuss her options for organizing a business entity for this business activity. Also discuss how her options may be different if Allison wishes to bring her younger sister in to help her operate the business and be a co-applicant on the initial business loan to get started.