SAS BBQ EQUIPMENT

SAS BBQ Equipment



SAS BBQ EQUIPMENT

Suggest a trading name for the new company. With reference to the case study, which type of business structure would you recommend and why.

ANSWER

The name of the new company should be “SAS BBQ Equipment”; this name is derived from the initials of the owners of the company, i.e. Stella Lawson, Andrew Steward and Sammy Fields.

They should go for partnership form of business because the partnership form of business would be the best for them as the owners would be able to have complete control over the operations of the business. They are investing huge money in the business, and by entering into a partnership, they would make sure that they have complete control over the operations of the business.

b) Explain one disadvantage and one advantage of your recommended structure.

ANSWER

The biggest advantage of a partnership is the ease of formation and ease of liquation. When some partners enter into a business, it is very easy to develop a formal contract for the partnership, as it does not have any legal complications in the making. This is one of the easiest things to do, because there are no capital requirements like a corporation.

There are a few disadvantages as well of the partnership form of business as well; the biggest disadvantage of such a form of business is that all the partners or one of the partners will have to bear the burden of unlimited partnership. This implies that, unlike a corporation, the business is not separate from a business, and if the business fails to pay its dues on time, the creditors will have the right to force the partners to sell their personal assets to pay their loans.

Working capital

Explain, using a diagram, the working capital cycle for the business. ...