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Q. Presented below are five independent situations.
(a)Fiona has just graduated with
a media and communications degree and wants to start an events management business. She has some savings and her family is willing to support her in her endeavours. Although she has had offers to work for several established businesses, Fiona wants to try it on her own and she wants to maintain control over the business.
(b)Mark has been operating as a sole trader for a number of years. Profits are slowly increasing and he expects his gross profit before income tax this year to be around $200 000. Mark also has an opportunity to expand operations and will need to borrow larger sums from a bank or similar financial institution.(c)Maurice, Jacob and Emily have all just graduated with commerce degrees, one in accounting, another in IT and the third in marketing. They want to combine their skills and start a business selling goods over the internet.(d)Amanda and Jessica have been friends since school and want to make a go of their hobby of jewellery making. They already have fashion stores interested in stocking their product, plus they have a web site and sell goods over the internet.(e)Michael Murphy and Steve Elks each own separate printing businesses. They have decided to combine their businesses. They expect that within the coming year they will need significant funds to expand their operations.
In each case explain what form of organisation the business is likely to take Ã¢â‚¬â€ sole proprietorship, partnership or company. Give reasons for your choice.
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