Your best friend is a successful sole proprietor. Per the most recent valuation, the FMV of his business is $$2$ million. He wants to grow the business and ask you to invest $$2$ million cash in exchange for $50\%$ share of the new business. Per the business plan, the company is expected to generate $($$$300,000)$ loss in year $1,($$$100,000)$ loss in year $2,$ $$100,000$ income in year $3,$ $$500,000$ income in year $4,$ and $$1$ million in year $5$ but there is no guarantee for such future performance. Your friend is subjected to the highest income tax bracket. No NOL.

Question $-$ Your friend asked you to decide which entity type $-$ C corp, LLC $($taxed as a partnership$)$ or S corp $$ will be best for the new business. Choose one and explain why you selected that entity type.