Three (3) personal trainers at an upscale health spa / resort in Rancho Mirage, California, want to start a health club

[answerhappygod]

Three (3) personal trainers at an upscale health spa / resort in
Rancho Mirage, California, want to start a health club that
specializes in exercise programs for people in the 50+ age
range.
The trainers Donna Rinaldi, Rich Evans, and Tammy Booth are
convinced that they can profitably operate their own club. They
believe that the growing population in this age range, combined
with strong consumer interest in the health benefits of physical
activity for older people, would support the new venture. In
addition to many other decisions, they need to determine the type
of business organization that they want to form: incorporate as a
corporation or form a General Partnership or Limited Liability
Company.
They intend on hiring several employees who will work work the
front desk answering phones and setting up personal training
appointments. They will also hire other personal trainers as
the business hopefully grows. The customer base will generally be
elderly and there may be some body contact between the trainer and
the client as deemed appropriate to show the client technique,
movement, etc.
When it comes to organization, none of the trainers are very
well organized and they tend to run things very
casual.
They do have some cash to purchase items but it will deplete
their savings. They intend on leasing and purchasing gym
equipment, they will have to purchase computers, phones, and other
equipment and will have to remodel their gym. They will be
leasing the space where the gym is located.
Rich believes there are more advantages to the corporate form
than a general partnership or LLC, but he has not convinced Donna
and Tammy of this. Donna believes a general partnership is
the way to go while Tammy would like to setup an LLC.
The three (3) have come to you, a small-business consulting
specialist, seeking information and advice regarding the
appropriate choice of formation for their business. They are
considering the general partnership, LLC, and corporation
options.
They generally get along and agree on things but there may be
times of disagreement so they do not know if this should factor
into what type of entity they should create. Also, Tammy is
in her late 60's and believes she may be retiring in the next 5
years.
They heard something about an S Corporation and C Corporation as
well as closed corporations. They would like to know what
these are about.
As with any exercise activity, there can be injuries. Is
there any way they can minimize exposure to lawsuits in any entity
they form or doing other things in the gym itself.
Finally, Donna, Rich, and Tammy believe they will qualify to get
a small business loan through the government. In terms of
weighing this option, they would like you to explain if they should
get a loan or bring on investors.
Based on the facts above and what you have learned from your
studies, you will write to them a three to five (3-5) page letter
in which you will: