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In: Operations Management

FULLY DISCUSS THE ISSUES IN THE FOLLOWING FACT SITUATIONS: 1. John Jones and his life long...

FULLY DISCUSS THE ISSUES IN THE FOLLOWING FACT SITUATIONS:

1. John Jones and his life long friend, Billy Bolling, decide to open a business to grow, refine and market medical grade marijuana. They ask your advice as to the type of business organization they should form. Give your advice as to the best type organization for their endeavor and the advantages and disadvantages of your selection.

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Expert Solution

In the provided case, John Jones and Billy Bolling want to open a business to grow, refine, and market medical-grade marijuana. Since both are friends and want to start the business, the most suitable business structure for them would be a partnership. They can open a partnership firm and can decide on the responsibilities each one of them would be handling.

There are the following advantages of a partnership organization:

1. It is quite easy to establish and operate.

2. They won't have to pay income tax on their partnership firm.

3. The control of the organization would stay in their own hands.

There are the following disadvantages of a partnership organization:

1. Partners are severally and jointly liable for obligations such as tort, contract, breach of trust.

2. A partner cannot transfer the interest in the business without the consent of others.

3. If one partner wants to withdraw, the partnership will be dissolved.

keosha answered 7 months ago
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