Bus Law Case Study 4
Running Head: Case Study #4
Case Study #4
Initial Thread
Jean S. Hamby
BUSI 561
Liberty University
Introduction Betty Wilson has decided to open a coffee shop and is considering various options including franchising, sole proprietorship, joint venture, corporation and partnership. In addition to determining the best legal entity to form, Betty has to decide if she will employ or partner with various friends and family members. Finally, she plans to name the coffee shop The Gathering Place and must determine if the name is available and a good choice. This paper will evaluate the pros and cons of various business options, address the dilemma of whom to hire and determine if The Gathering Place is a viable option for the name of the coffee shop.
Legal Entity Analysis When forming a business, the owner or owners have many legal entities to consider. Before selecting one type of business formation over another, the owners should consider the advantages and disadvantages of each legal entity to determine the most viable option. To assist Betty, in making her decision; sole proprietorship, joint venture, partnership and franchising options will be evaluated.
Sole Proprietorship A sole proprietorship can best be described as a business entity with only one owner and that owner has complete control of management decisions. Typically, a sole proprietorship can be formed with very little expense or time investment. Essentially to form a sole proprietorship the owner is in business once the required licenses are obtained. While timeliness and cost effectiveness are advantages of this type of business formation, a significant disadvantage is that the owner assumes unlimited personal liability for any liabilities incurred by the business (Armstrong & Permenter, 2011). Another disadvantage is that because a proprietorship is not a separate entity the owner is responsible for all tax payments associated with the organization’s profits (Kubasek,
Case Study #4
Initial Thread
Jean S. Hamby
BUSI 561
Liberty University
Introduction Betty Wilson has decided to open a coffee shop and is considering various options including franchising, sole proprietorship, joint venture, corporation and partnership. In addition to determining the best legal entity to form, Betty has to decide if she will employ or partner with various friends and family members. Finally, she plans to name the coffee shop The Gathering Place and must determine if the name is available and a good choice. This paper will evaluate the pros and cons of various business options, address the dilemma of whom to hire and determine if The Gathering Place is a viable option for the name of the coffee shop.
Legal Entity Analysis When forming a business, the owner or owners have many legal entities to consider. Before selecting one type of business formation over another, the owners should consider the advantages and disadvantages of each legal entity to determine the most viable option. To assist Betty, in making her decision; sole proprietorship, joint venture, partnership and franchising options will be evaluated.
Sole Proprietorship A sole proprietorship can best be described as a business entity with only one owner and that owner has complete control of management decisions. Typically, a sole proprietorship can be formed with very little expense or time investment. Essentially to form a sole proprietorship the owner is in business once the required licenses are obtained. While timeliness and cost effectiveness are advantages of this type of business formation, a significant disadvantage is that the owner assumes unlimited personal liability for any liabilities incurred by the business (Armstrong & Permenter, 2011). Another disadvantage is that because a proprietorship is not a separate entity the owner is responsible for all tax payments associated with the organization’s profits (Kubasek,
References: Armstrong, J., & Permenter, J. (2011). The advantages of an incorporated practice. Optometry – Journal of the American Optometric Association, 82(12)-770. Bretsen, S. (2008). The creation, the kingdom of god, and a theory of the faithful corporation. Christian Scholar 's Review, 38(1), 115-154. Kubasek, N., Brennan, B., Browne, M., (2012). The Legal Environment of Business: A Critical Thinking Approach. New Jersey: Pearson Education, Inc. (Original work published 1999). Nyadzayo, M., Matanda, M. & Ewing, M. (2011). Brand relationships and brand equity in franchising. Industrial Marketing Management, 40(1), 1103-1115. Owen, S. (2008) A random walk through the Subchapter S minefield. Journal of pass through entities. 21-50.