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Finance & Accounting
Pages 3 (753 words)
Memorandum Date: 4 February, 2013 To: From: Subject: Case Study Introduction This memo is solely prepared with the intension of providing a suitable business plan for Nathan and Kenneth that will help them in their venture of starting a moving business of their own…
Case Analysis The different forms of business are sole proprietorship, Partnership, Corporation. In sole proprietorship business is owned by a single person. The benefits of sole proprietorship are that the owner is entitled to all the profits, he can make his own decisions and the financial information of his business can be kept a secret. The demerits are that the owner has to bear all the risk of the business and funding the business can be difficult. Partnership is a kind of business in which two or more people own and operate a business. The benefits of partnership are sharing of responsibility, greater financial resources, sharing of business risk. The potential demerits are personal conflicts, profit sharing and difficulty in shutdown. Corporation is a legal entity which is separate from its owners. The benefits are that corporations have to pay lower tax rates and have an indefinite period of existence. The demerits are that the company needs to reveal its annual reports and which may provide valuable information to its competitors, the value of the shares largely depend on the change in stock prices. For Nathan and Kenneth partnership will be the best form of business ownership, since both of them have worked in similar field of moving business, they have good deal of idea in this field and their work as a team shall be helpful in implementing their business idea. ...
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