Used car business: S. Corporation or limited liability

Duke has been a successful used-car dealer for 25 years in the same location, operating as a proprietorship. In those 25 years, he has expanded his operation and become the largest independent car dealer in a city of 85,000 people. The few people in town can boast of a business reputation better than Duke's. As he says "I've always done business in a fair and honest fashion, and I've always tried to give my customers an honest deal. The public has responded well and last year the business revenue increased to an all-time high of $830,000."

As the business has grown, so have Dukes liabilities. On a given day, Duke will have cars worth from $350,000-$450,000 as inventory on the lot. "Twenty years ago, if I asked the bank for a line of credit of $200,000, they have tossed me out the front door. There is no question today's business is different."

Dukeâ??s only daughter recently married a garage mechanic who has worked in the area for the past three years. Though Duke thinks the boy is certainly nice enough, he does not believe he is very smart. "The kid sure knows how to fix a car, but that's as far as it goes," says Duke. "My last visit to the accountant, he suggested I consider incorporating. I guess he knows what he's talking about. That's all you hear today -- be a corporation. I guess he's right. But, to tell you the truth, I don't know."

Please post your references.

1.Should Duke incorporate or should he remain a proprietorship? Explain your answer.

2.Discuss five of the essential components of a business plan.

3.Explain the differences between an S. Corporation and a limited liability corporation.

4.Discuss the positive and negative aspects of purchasing a franchise.

5.Discuss the pros and cons of buying an existing business.

6.Would you recommend an S. Corporation or limited liability corporation for Duke? Explain your answer.

7.Define and discuss four of the eight archetypes for new business ventures.