As with any activity involving a group of people, development teams need to have a clear organizational structure with all the details and responsibilities outlined in order to maintain a working system for the project. Given the nature of humans, each individual is going to be concerned with different elements of the project. Having an outline that provides for clear regulations leads to a more cohesive system in which everyone is accounted for. Taking into consideration liability, tax implications, payout, and management, every development team would do well to understand how the organization is put together and how the individuals involved play a role.
A large focus of FINC 676 (Commercial Real Estate Law) was placed on learning about the various organizational structures that are available to those involved in a myriad of real estate driven transactions. As a part of the course, students were asked to analyze the given conditions of a proposed development team and recommend a business entity structure that would best suit the group’s needs. When given the parameters of the group, the various available structures were analyzed based on their ability to serve the proposed entity and its members. After many options were considered and eliminated, the group landed on recommending the prospective developer and investors form an LLC as it provided each member with protection against liability and maintained each individual’s right to share the control over the project. The full report with all analysis and reasoning is attached below.