Business Finance
small business management, business and finance homework help

Question Description

question 1.

  • From the e-Activity, describe the most appropriate form of ownership for your new franchise based on your current financial situation. Provide specific examples to support your response.
  • Assume the form of your new business will be a partnership (if you have not already done so). Discuss the types of conflicts that may arise and how you could prevent them from arising in the first place.
  • file for question 1 is below.
  • Question 2.
  • Based on the case study (“Firehouse Subs”), determine which of the three options executives are considering would be most beneficial to a single franchise owner. Explain your rationale.
  • From the e-Activity, discuss the advantages and disadvantages of being a franchisee of the franchise you selected. Provide specific examples to support your response.

Unformatted Attachment Preview

BUS402: Small Business Management Overview of the Major Forms of Business Ownership Feature Sole Partnership Proprietorship C S Corporation Corporation Limited Liability Company Owner’s Unlimited Unlimited for Limited Limited Limited Any number Maximum of 2 or more general Personal partners; Liability limited for limited partners Number of 1 Owners 2 or more (at least 1 general 100 (with partner restriction of required) Tax Liability who they are) Single tax: Single tax: Double tax: Single tax: Single tax: proprietor pays partners pay corporation owners pay members pay at individual rate on their pays tax and on their on their proportional shareholders proportional proportional shares at pay tax on shares at shares at individual rate dividends individual rate individual distributed rate Maximum Tax Varies based on Varies based Varies based Varies based Varies based Rate tax laws on tax laws on tax laws; on tax laws on tax laws 15% on distributed dividends Transferability Fully May require Fully Transferable Usually of Ownership transferable consent of all transferable (but transfer requires through sale or partners may affect S consent of all status) members Perpetual life Perpetual life transfer of company assets Continuity of Ends on death or Dissolves upon Business insanity of death, insanity, proprietor or or retirement upon of general termination by partner Perpetual life BUS402: Small Business Management proprietor (business may continue) Cost of Low Moderate High High High Poor to average Poor to High High High Formation Liquidity of average Owner’s Investment Complexity of Extremely low Moderate High High High Low Moderate Very high Moderate to High Formation Ability to Raise high Capital Formation No special steps No written Must meet Must follow Must meet Procedure required other partnership formal same formal than buying agreements requirements procedures as requirements necessary required (but specified by C corporation, specified by licenses highly state law then elect S state law recommended) status with IRS ...
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Small Business Management
Question One
The most appropriate form of ownership of my new franchise is a sole proprietorship.
The reasons why I decided to have a sole proprietorship is because it requires less capital to
maintain and the tax rates are calculated based on the personal level tax rates. However, having a
partnership or getting involved in a corporation or limited liability company entails more
procedures. However, the income received from the other forms of franchises is taxed at the
personal level on the dividends, and the businesses pay tax at the specified rates. The decisions
made when running a sole proprietorship depend on the mind of one person hence it becomes
quick to make decisions.

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