Clara and Larry Allen are going to operate their bakery shop as a Partnership or as an S Corporation. After paying salaries of $45,000 to each of the owners, the bakery shop's net earnings are projected to be about $60,000 annually. The net earnings of the business are to be invested in the growth of the business.
Prepare a memo identifying as to which of the two (2) entity forms that Clara and Larry should select (considering both Tax and Nontax Factors).