Our client, Sven Jorgenson has worked for a large commercial bakery for several years. He would now like to start his own business baking his signature pastries. He will be working with his long-time associate, Ingrid. Sven will be providing the majority of the cash and equipment for the business; Ingrid will be providing her services and the use of a building she owns where they can begin the bakery. They expect the business to generate modest income in the early years and more income later. Since they will be quitting their jobs to begin the business, Sven and Ingrid will need the profits generated by the business to replace their salaries but, as profits increase in later years they will use them to expand the business. Assume both Sven and Ingrid have an effective income tax rate of 25%. They have asked for your assistance in selecting the appropriate business entity type for their activity. Please explain to them which business entity they should choose and why and describe generally, the operation of their new business entity.