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1401ICT Introduction to Information Systems

   

Added on  2020-02-23

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STARTING A NEW BUSINESSBy (Name)CourseInstructorUniversityStateDate1
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The business that I am intending to put up is a Pizza Company. Being that I did not have enough capital for the business, I decided to talk to two of my friends to join me so that we may work as partners. We agreed that two of us shall run the business as the directors and the third shall just be a member. It is because he lacks the managerial skills. The money contributed by each one of us shall reflect our shares in the company. We agreed that the name of our company shall be PIZZA SWEET COMPANY LIMITED. This company shall be making pizzas and selling to our targeted market which shall be the colleges and the locals who are around to where we intend to set up our industry. Proposed Legal Structure Everyone who starts a business with others have to select a legal structure. Selecting legalstructures means choosing one of the customary formats that include: corporation, partnership, limited liability company (LLC), or a nonprofit company. My proposal was that the company employs a limited liability structure. My reasons for choosing this structure are that: First, it helps the business to avoid double taxation and to support many classes of stock if desirable. Double taxation typically happens when an entrepreneur chooses a C-Corp business structure, which mage the company and its owner to be taxed separately (Business.gov.au., 2017). A limited liability company is taxed just like in sole proprietorship; hence, prevents double taxationto occur. Second reason for choosing LLC structure is that making changes is easy. It is simple to add a new partner and to sell entity to another person. It is more flexible than the C-Corp business arrangement where minutes are needed when making board decisions (Meermann, 2016). In general, it has less restrictions as the management of a business is concerned compared to other business structures. Third reason is that LLC structure allows members to protect their 2
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private assets against the law cases aimed at the company. In sole proprietorship the owner is solely liable for all the liabilities while in partnership, the liability is shared. After few years the founders can decide to replace LLC with S-Cop or C-Corp for it to be able to be merged with another business (Meermann, 2016). Lastly, it is easy to register a limited liability company. An LLC is perfect for business beginners because it easy to register without the need of having attorney. Once the LLC has beenregistered by the state, it is easier to obtain the Employer Identification Number (EIN) from the Internal Revenue Service that enables one to obtain business bank accounts and checks (Meermann, 2016 p. 5). Responsibility of the MembersSometimes friends are attempted to seal deals with word of mouth or by a handshake. It is because friends see that formalities slow things down. However, to avoid any misunderstanding we decided to formalize our contract using proper documentation that we believed would give us and our business strong legal protection. Because we are all the managers, we owed each one duties of trust. Therefore, the three relations we have involves:Contractual relationship with the supplier A win-win situation for the parties involvedRelationship focused on performance during the implementation, but not the business outcomeThe most successful businesses consolidate the risk processes that involved the supplier and the client sharing the management and identification of all the business risks (Business.gov.au. 2017). Events related to controlling risk may become the sole responsibility of any party; however, both the parties should have the knowledge of the risks and the way they are managed. 3
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