Question

32 EE illi E. ab a. & 11 CIE 5-3 FORM OF BUSINESS OWNERSHIP The needs of the businessperson starting a new business are a major consideration when deciding the best form of business ownership. The kind of business being started is also important to consider when deciding to make your new business a sole proprietorship. partnership or corporation. Look at the list of new businesses below. Indicate the form of ownership you think would be best for each business. Give the reasons for your selection and consider and discuss the pros and cons of the form you chose as discussed in the chapter, Business Form Reason A Dd Taco franchise Nursing home Gardening service A Coffee shop Hybrid car company Hair Salon Baseball cap manufacturer A Dental practice 2. If you wanted to structure your business as an LLC, research and describe the process. 3. List at least 3 pro and cons of franchising Default Style Frelih

Answer 1

Del Taco Franchise - A franchising - It'll be a franchised business as it's been an established brand of restraunts & we cannot open up under the same name as it might invoke legal actions & franchisee are under trademark & copyright law.

Nursing home - a non-for-profit organization, this setup will help with tax savings & can ease of opening up of the place.

Gardening service - can be a sole proprietorship business, as in this the profit can be less as the investment will also be comparatively low, so better to start alone & not have to share the profit percentage.

A coffee shop - can be a franchise, sole proprietorship or partnership, depends on the initial investment, location expense, target customer.

Hybrid Car Company - partnership, joint venture will be a fruitful idea as this requires a lot of capital, men & machinery and the goodwill of the partners might help with capital infusion from investors.

Baseball Cap Manufacturer - LLP, LLC or franchise which has an exclusive license of any baseball team or have an contract signed with the baseball player.

Hair Salon - LLC or LLP, depends on the scale of investment required.

A Dental Practice - professional corporation, as it will be run by a professional dentist.

To setup a business as LLC - we need to register it with registrar, need to have a business plan, choose a unique name, and other needful.

Franchising - Pros :-

1. Get the goodwill & brand name

2. brand value, established loyal customers

3. training & techincal expertise

Cons :-

1. huge capital investment

2. high risk of losing on brand value or goodwill or market share

3. standardised process of everything, no choice is adhering to the franchisor