An Ideal Form of Business - Case Study Example

In addition, with partners that want to join her business and their various reasons, which probably may not be in line with the image she wants to project, the lack of partners makes it an attractive option. The business is also flexible and permits her to uphold a relationship with her target clients, as well as having no corporate tax (Knapp & Semmel, 2011). This makes it an attractive option. However, it is true that it is not an extremely attractive option because Betty will be fully liable for the business, which is risky because she will be welcoming the customers into her place of business.

Betty will also have to deal with raising the funds on her own and deal with her limited managerial abilities (Knapp & Semmel, 2011). The reduced sources of capital that are available for her also make expansion difficult. Finally, the fact that she is obligated to use her own funds and that of her family, coupled with unlimited liability does make it an unattractive option. Corporation I find this to be short of the best option, despite the provision of liability protection. Considering that the integration time for a corporation requires more money and time as compared to a sole proprietorship.

The business will also be regulated and supervised by entity rules from local, state, and federal jurisdictions. This would make it more difficult to use the name “The Gathering Place” since it is already in use in the state and another state. Incorporation of Betty’s business may also result in the business being liable to pay more taxes (Cross, 2009). In addition, the dividends that the corporation will pay to shareholders will not be deductible, and the income may be double taxed.

I do not believe that franchising will be applicable in this case; the corporate feel it gives the business may not be suitable for a Christian family-based establishment. Partnership It is my belief that a partnership would be the best idea for Betty’s coffee shop. Indeed, it is true that this form of business will allow Betty to share the business risks and profits with those who are close to her. It is also true that Betty has several takers for the partnership already. The startup cost will be low; the business will possess more borrowing capacity compared to the sole proprietorship, and she can make high-caliber Christian employees her partners, which will enable her to get more customers from other churches.

In addition, splitting of income will allow her to save on taxes (Mongalo et al, 2010). There will also be limited regulation from outside. This is the best option for Betty and her business. Partners, Investors, Employees Betty’s Husband I agree that Betty taking her husband, as a partner would be a splendid idea for the business. As Christians, it is true that they are one as advised by the Bible, and are one in the eyes of God. John, Betty’s husband, would be an ideal partner in a coffee shop with a Christian setting, especially in a society where it feels like the institution of marriage is under threat.

A coffee shop with a married couple as partners would be a sure draw for the conservative Christian base. John and Betty can contribute to the business as separate entities, from personal sources and bank loans, although they will operate the business as one.