Ask Question, Ask an Expert

+61-413 786 465

info@mywordsolution.com

Ask Business Management Expert

Rene's decision

In 2004, Rene opened his shop with only one full-time employee. Since then Rene has added two general partners and greatly expanded the operation. Over the past year, it has become obvious that the group could open another outlet. However, the partnership does not have enough money to fund this growth strategy.

Rene's banker has suggested that the company borrows Rs. 500,000 from the bank and pledges the firm's assets as collateral. The idea appears fine to the partners, although they are concerned about the risk involved. If the second shop does not do well, it could affect the success of the first shop by siphoning off funds to repay the loan and might therefore affect its brand.

Rene has been thinking about incorporating the business, selling stock, and using these funds for expansion purposes. He has not shared this idea with his banker because he wants to give it more thought. However, he intends, first of all, to talk it over with his partners in the coming week.

Questions

a) Discuss the advantages and disadvantages of having a general partnership as business structure.

b) What are the consequences for Rene to shift from a partnership to a company?

c) Discuss the main factors that must be considered by an entrepreneur when choosing an ownership structure for his/her business.

Business Management, Management Studies

  • Category:- Business Management
  • Reference No.:- M9585844

Have any Question?


Related Questions in Business Management

Explain why some organizations may not place enough

Explain why some organizations may not place enough importance on disaster recovery. What might happen to these organizations in the event of an actual disaster?

Why is the labor demand for an individual firm in a

Why is the labor demand for an individual firm in a competitive industry more elastic than the labor demand for the entire industry?

Let x be a random variable then ex2 gt ex is it always

Let X be a random variable. Then, E[X^2] > = E[X] . Is it always true? Suppose that, X is a random variable, taking positive integer values, which satisfies E[(X-6)^2]=0. Then, pX(4)=pX(5). Is it always true? Suppose tha ...

Explain the purpose of each of the five parts in the ryan

Explain the purpose of each of the five Parts in The Ryan White Care Act. Explain other viewpoints or opposing viewpoints of the Act. Describe your stance on if there is a need for the Ryan White Care Act with the Afford ...

Can anyone give me some examples of companies who spent

Can anyone give me some examples of Companies who spent time researching and problem-solving the wrong problem? Don't need lots of details rather examples of companies and a brief description.

List 2 penalties a judge may impose on you if you fail to

List 2 penalties a judge may impose on you if you fail to meet your duties under the WHS act.

Review the resources on swot and tows analyses then

Review the resources on SWOT and TOWS analyses, then complete the following: First, decide which company you are going to use for your final project from the following list: Long-Term Orientation in the Benedictine Monas ...

Suppose the schoof company has this book value balance

Suppose the Schoof Company has this book value balance sheet: The notes payable are to banks, and the interest rate on this debt is 10%, the same as the rate on new bank loans. These bank loans are not used for seasonal ...

How does servant leadership is looked at by judaism

How does servant leadership is looked at by Judaism, Buddhism, Islam and Christianity ? Similarities and differences in the four religious traditions based on servant leadership?

Describe the strengths and weaknesses of knowledge

Describe the strengths and weaknesses of knowledge management systems.

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Why might a bank avoid the use of interest rate swaps even

Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate

Describe the difference between zero coupon bonds and

Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a p

Compute the present value of an annuity of 880 per year

Compute the present value of an annuity of $ 880 per year for 16 years, given a discount rate of 6 percent per annum. As

Compute the present value of an 1150 payment made in ten

Compute the present value of an $1,150 payment made in ten years when the discount rate is 12 percent. (Do not round int

Compute the present value of an annuity of 699 per year

Compute the present value of an annuity of $ 699 per year for 19 years, given a discount rate of 6 percent per annum. As