Learning Activity # 1

Inez is a sole proprietor/owner of New Tech, a computer and IT consulting business. Her clients are small to medium sized businesses, colleges, and individual home users. Inez wants to expand her business, buy new equipment, and hire an employee. She needs to obtain additional capital to expand New Tech, but she does not want to lose control of the business. Also, Inez has chosen not to take out any sort of loan or use a credit card to obtain additional capital to expand.

As a sole proprietor, what is her best option to obtain additional capital to expand and yet retain control of the business? Why?

Learning Activity # 2

Lana has started a computer accessory manufacturing and sales business. She never planned to have a business, but had created a certain accessory that her friends thought was interesting, and she made these accessories for them. Suddenly people were paying her, and then she started selling the accessories through a website. She has never formed any type of business entity.

Lana has now decided she wants to sell these accessories in Japan, and realizes she needs to formally adopt a specific business organizational form for the business.

Discuss a recommendation for an appropriate business organizational form for the business in the United States and for expanding the business in Japan. Explain the rationale for the choice of organizational form for Lana's business.