Question

LAW200 Commercial LAW LAW ASSIGNMENT Weighting: 1 5% of final grade Due Date: 28 MAY 2019 Word limit: 1500 words PART A You have the task of advising clients as an accountant. John Smith has come to your office and told you that he is considering the establishment of a small business in the fashion industry, particularly in men's clothing. He seeks your advice in relation to the formation of the most appropriate business structure to operate his new venture. Draft a short letter to John advising him of the key issues that you consider important. Your answer should be set out in the form of a letter. You should try and present you letter in the most informative manner that is suitable for a client.

Answer 1

To

John Smith.

Subject :- information regarding the formation of a new business.

The bussines that your are going to start is in a fashion industry.

In fashion industry particularly in men's clothing

The suggestion from us is to start a small scale limited liability corporation with a minimum capital investment.

Key points that effects our desicion is as follows :-

1. The market for the bussiness is high

2. The money rotation cycle (credit cycle period) is very less compared to all other bussiness.

3. The required amount of investment is less

4. Huge profit margin in the clothing bussiness

5. By formation of small scale company we can get tax benefits from the government.

6. In the fashion bussiness if you start boutique services it comes under professional services and it gives a boost to quick development of the bussiness.

7. By formation of small scale industry we can minimise the mantainence of accounting costs and all other statutory charges and managerial costs.

These are all the information required to for the formation of a new company

If any assistance required to you in the future you are always welcome by our organisation.

Thank you.

From

The accountant

XXXX Ltd.

The above letter was drafted in the view of accountant giving assistance to a bussiness person who is trying to start new bussiness.

This is a letter drafted by the accountant to the john Smith

These are all the information required to complete the above given task.

I hope, all the above drafted letter and information in the above letter is useful and helpful to you.

Thank you.