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Business Law in Finance and Accounting - Essay Example

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Given the fact that the three partners have been working together for the fixed period, the type of the business organization that they currently operate is a joint venture. In a joint venture, parties agree to come up with a new entity by contributing their assets…
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Business Law in Finance and Accounting
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Download file to see previous pages Upon the dissolution of the ongoing partnership, the assets are distributed equally. By continuing with the current form of business organization, Barbara, Helen and Maureen will experience various advantages and disadvantages as discussed below.
Synergy. By combining their strengths, the three partners have sufficient potential to deal with the business challenges and achieve their objectives. Given the fact that each of them has a certain skill, they will be able to undertake various responsibilities for example marketing and innovation without incurring extra cost of hiring external personnel.
Fewer regulations. As compared to corporations, joint ventures are subject to fewer regulations. This implies that the three partners owning Sweet Pleasures will not be restricted to undertake most of the activities (Sarah and Vida, 2013). Additionally, the partners will not incur high costs such as undertaking an initial public offer (IPO) which public companies engage in. As far as taxation is concerned, Sweet Pleasures, is exposed to fewer taxes, thus the partners are able to make high profits in future if they continue to work as a joint venture.
Easy to form. Joint ventures are relatively easy to form. This is based on the fact that during their formation, the partners do not engage in extensive process. However, during the initial stages, considerable thought should be put while looking for the best partner who has a positive mentality towards business activities (Lucy, 2013).
Accessibility of capital. By operating as joint venture, Sweet Pleasures will have stronger potential of accessing greater amount of capital (The Company Warehouse). Based on their interest in business activities and future expansion, financial institutions will likely be in a position to provide adequate funds to the partnership.
Liability. By working jointly, the partners are liable for the actions of other in the partnership. This implies that if a partner fails in his or her roles, ...Download file to see next pagesRead More
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