An individual has started a new business. While he is confident that, in the long run,...
An individual has started a new business. While he is confident that, in the long run, it will be very profitable, he expects the business to incur losses in the first 3 to 5 years of operation. Would you advise this person to operate this business as a proprietorship or, alternatively, incorporate the business?
Homework Answers
It is advisable to to operate this business as a proprietorship. Incorporation involves lots of formalities at the MCA. It involves lots of filings and other documentation requirements. Since business is expected to incur losses in the first 3 to 5 years its best to start proprietorship at the begining. Everything changes with time. Expectations may not be correct, market changes in every minute. If as expected business prospers in long run still they can think about incorporation at that time. So its best to start proprietorship business at first.
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An individual has started a new business. While he is confident
that, in the long run,...
An individual has started a new business. While he is confident that, in the long run,...
An individual has started a new business. While he is confident that, in the long run, it will be very profitable, he expects the business to incur losses in the first 3 to 5 years of operation. Would you advise this person to operate this business as a proprietorship or, alternatively, incorporate the business? (PLEASE ONLY ANSWER IF YOU ARE ABLE TO ANSWER IN DETAIL. NO FEW SENTENCES. NEED DETAIL ANSWERS)
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Can I please receive some help on this question?
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Can I please receive some help on this question?
This is a small business started by Alex Lopez in 1980. He was 22 years old, and had just graduated from UTSA with a degree in Business. As a young entrepreneur, he bought a greenhouse, and started a hydroponic farm growing tomatoes. Growing various vegetables in water was a new industry at that time. Alex's business is operating in a perfectly competitive industry, competing with other greenhouse and field producers in...
Several years ago, your client, Brooks Robertson, started an office cleaning service. His business was very successful owing much to his legacy as the greatest defensive third baseman in major league history and his nickname, "The Human Vacuum Cleaner." Brooks operated his business as a sole proprietorship and used the cash method of accounting. Brooks was advised by his attorney that it is too risky to operate his business as a sole proprietorship and that he should incorporate to limit...
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