Kelly and Karla were roommates at Lynn University and graduated last May.While on a post-graduation celebration trip to Costa Rica, the two women beganexploring the idea of opening a restaurant on...

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Kelly and Karla were roommates at Lynn University and graduated last May.While on a post-graduation celebration trip to Costa Rica, the two women beganexploring the idea of opening a restaurant on South Beach in Miami, Florida. Neither hasany previous experience in starting or operating a restaurant, but both have extensiveconnections in the Miami-Dade area because of the many friends they made whileattending Lynn. They intend to attract health-minded, college-age students to their newrestaurant, The SoBe Health Hut. Kelly and Karla agree that each will invest equally interms of time and money. However, in addition to these equal contributions, another$100,000 is essential for the restaurant to succeed.1) Explain the key elements of – and the differences between -- a soleproprietorship, a general partnership, a limited liability partnership, and acorporation. (65%)2) What type of the above four business entities is best suited for The SoBe HealthHut and why? In your answer, explain who will manage the store and whatpersonal liabilities will Kelly and Karla face and why? (35%)You shall be graded on your complete and proper explanations, research andlanguage usage, all as noted below. The report must be no more than 1,000 words andis to be submitted in typed, double-spaced form.
Answered Same DayMar 18, 2021

Answer To: Kelly and Karla were roommates at Lynn University and graduated last May.While on a post-graduation...

Parul answered on Mar 19 2021
140 Votes
“SoBe Health Hut” - Kelly and Karla’s Business
Ans1. Kelly and Karla are starting a new business, one of the most critical decision that they should take at the very beginning is about the structure of t
he business.
Sole proprietorship:-
Essentially, when a business becomes a sole proprietorship then it is not considered as a legal entity. Instead, sole proprietorship as an entity can be referred as a business that is completely governed and owned by a single person. This individual is characteristically liable for loans, paying the expenses and managing the assets in sole proprietorship. One drawback or disadvantage of sole proprietorship is that personal belongings and assets that can be used and considered by the creditors of this company. Nevertheless, it is most nascent form of setting up a one-person company in action and have to pay minimum expenses with respect to various other type of ownership.
General Partnership:-
As the name suggests, it represents a business that is owned and governed by two or more people such that they share losses incurred and profits generated by the business equally. Partnerships includes various legal procedures and consideration that one requires to be aware about such that business is operated smoothly. Furthermore, there are different kinds of partnerships that business can consider to establish based on the requirement like general, limited and joint ventures. There is no requirement to file the documents for partnership. Partners in the business can participate in the working of business and contribute equally in the operation unless and until a formal agreement of partnership directs otherwise. In case partners mutually agree to share the profits and losses from the business in unequal way then it is best to document these terms and conditions with a legal stamping on the same. One of the similarity of partnership with the sole proprietorship is that, all the partners of the business requires to report their share of losses and profits with their personal taxes...
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