The Management Decision That Was Made

Abstract

After reading the requirements of this assignment I was lost. I had read chapters 1-4, also did my intellipath. But I'm not really sure if I have it figured out now. I believe I need to chose what path is best for the business but also have to keep the wife happy. Not always an easy thing but it is doable. A partnership would be the answer to the situation. A partnership allows multiple advantages which I hope to explore further.

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The Management Decision that was made

I felt that after looking over the different business categories, Sole Proprietorship, Partnership, and Corporation. Let's look at Sole Proprietorship; this is how a lot of large business started out. McDonalds started out in 1937 as a food stand selling hamburgers for about $.10 and bottomless orange drink. The idea was expanded into a multi-billion dollar business. This kind of small business can go big and make it or they can fold up and disappear. There is a small start up cost. The taxes are included in the owner's personal taxes and easier to control the business.

A Partnership is what my Uncle Wayne had when he started his cleaning service. Three people joined together and contributed to the business with funds and experience. After being business for a couple years Wayne bought out one of his partners changing the business dynamics. Even though he still had a partner Larry became a limited partner and after a few years Wayne bought him out as while. Now Uncle Wayne owns and runs Delta Cleaning Services Inc. so he when from partnership to sole proprietorships.

A partnership has advantages, the start-up and legal fees are very small that is why I feel that this is the answer for the scenario. As a partnership they can pool a larger source of funds. The down fall is if one of the partners in the partnership wants out the other has to buy them out and if they don't have the funds the business will not make it, but if the person has funds they can buy out the partner that wants out like my Uncle did.

The last business is Corporation and this is broken up into four different kinds, Closely Held Corporations, Publicly Held Corporation, S Corporation and Multinational Corporation.

1. Closely Held Corporations: They sell their stocks to family members keeping it private.

2. Publicly Held Corporation: this is the opposite these stocks are traded on the open market.

3. S Corporation: this allows small business to have some of the big boy's benefits; limited liability, no double taxes only taxed once. But there are lots of things that need to be meet to become a S Corp.

4. Multinational