Which Type of Business Entity?Since graduating from college six years ago, Heidi Cantu has...

Which Type of Business Entity?

Since graduating from college six years ago, Heidi Cantu has worked for a national chain of shoe stores. She has held several positions within the company and is currently manager of a local branch store.

Over the past six years, Heidi has observed a pattern in women’s shoe purchases. She informs you that a large majority of the shoes sold are white, black, blue, or gray and that almost every woman owns at least three pairs of each of these colors. Since she has always wanted to be in business for herself, Heidi’s idea is to open a women’s shoe store that sells only white, black, blue, or gray shoes. She has discussed her plan with a number of people in the industry, and they have encouraged her to pursue her dream of becoming an entrepreneur.

A new upscale shopping mall is opening nearby, and Heidi has decided that now is the time to take the plunge and go into business for herself. She plans to open a shop in the new mall called WBBG Shoes that will only sell white, black, blue, and gray shoes.

One of the things Heidi must decide in the process of transforming her idea into reality is the form of ownership for her new business. Should it be organized as a sole proprietorship, a partnership, or a corporation?

What advice would you give Heidi? What advantages or disadvantages are there to each choice? What do you think of the proposed name for the business, WBBG Shoes?