Preliminary Assessment Task- Nature of Business
Preliminary Assessment Task- Nature of Business
Report to: Fantastic Entertainment- sole trader
Report created by: Easy Accounting
a) The Advantages for Fantastic Entertainment to Expand
• Present position of Maturity on the business life cycle
The advantages to Fantastic Entertainment expanding their business will increase their ability to increase sales/ revenue. By staying in the maturity stage of BLC business they will decline due to competition. Other businesses that have expanded are more efficient and offer more product.
• Sole trader to partnership
The advantages to Fantastic Entertainment going from Sole trader to partnership are that it provides a healthier foundation for a company. Sole traders assume full responsibility and liability for the actions and finances of the business having an unlimited liability in most cases. Another advantage to Fantastic Entertainment having a partnership is that they are often perceived as professional. They are considered less of a "risk" to invest in or buy than a sole trader company. There would also be more capital from partners, more experience and less of a work load.
• Sole trader to private company (Pty Ltd)
The advantages to Fantastic Entertainment would be limitation of Liability, The private limited company advantages are that the company is a separate corporate body and liability for payment of debts stops with the private ltd company, the owners, shareholders are not personally liable. There will also be lower taxes by 30%, limited Company accounts and Sole Trader basic accounts, additional financial considerations and administration, management and business standing.
Sole trader to public company
The business is too small to worry about going that big because you are not after millions of dollars.
b) The Impact on your Creditors from your Choice of Legal Structure
Bankruptcy and liability (limited/unlimited)
Bankruptcy is a legal status of a person or organization that
Report to: Fantastic Entertainment- sole trader
Report created by: Easy Accounting
a) The Advantages for Fantastic Entertainment to Expand
• Present position of Maturity on the business life cycle
The advantages to Fantastic Entertainment expanding their business will increase their ability to increase sales/ revenue. By staying in the maturity stage of BLC business they will decline due to competition. Other businesses that have expanded are more efficient and offer more product.
• Sole trader to partnership
The advantages to Fantastic Entertainment going from Sole trader to partnership are that it provides a healthier foundation for a company. Sole traders assume full responsibility and liability for the actions and finances of the business having an unlimited liability in most cases. Another advantage to Fantastic Entertainment having a partnership is that they are often perceived as professional. They are considered less of a "risk" to invest in or buy than a sole trader company. There would also be more capital from partners, more experience and less of a work load.
• Sole trader to private company (Pty Ltd)
The advantages to Fantastic Entertainment would be limitation of Liability, The private limited company advantages are that the company is a separate corporate body and liability for payment of debts stops with the private ltd company, the owners, shareholders are not personally liable. There will also be lower taxes by 30%, limited Company accounts and Sole Trader basic accounts, additional financial considerations and administration, management and business standing.
Sole trader to public company
The business is too small to worry about going that big because you are not after millions of dollars.
b) The Impact on your Creditors from your Choice of Legal Structure
Bankruptcy and liability (limited/unlimited)
Bankruptcy is a legal status of a person or organization that