Question

Need essay (3-4) pages about:

Jose Rivera is a real estate entrepreneur. Earlier in his professional life, Jose was a successful executive with Mattel but he resigned in a desire to pursue other opportunities that would allow him to be his own boss. Today, Jose and his eldest son, Jorge, own and manage several large apartment buildings in Queens. The real estate business has been so successful that Jose owns home sin both New York city and the Hamptons and a 40-foot yacht, which is moored near his summer home. Jose’s two youngest children are enrolled in private schools and Jose plans to send them to exclusive and expensive private colleges, like the one their brother Jorge attended. Jose has numerous investments in addition to the real estate properties, which when the time is right, can be quickly converted into cash for college expenses.
Despite his real estate success, Jose has long desired to get back into the toy business and is now in the process of purchasing Toy Builder, a small establishment that manufactures electronic toy components for a large, nationally known manufacturer of toys and electronic games.   Jose looks forward to adding Toy Builder to his assets, as he hopes to utilize some of his prior Mattel experience to make the company even more successful. The small Toy Builder factory is in New Jersey and utilizes machinery that is highly specialized. New employees receive an orientation from the human resource department, as well as training in manufacturing processes and safety regulations.

Which form of ownership should Jose select for Toy Builder (e.g. sole proprietorship, partnership, corporation or some other structure) and why? It is wise to identify the advantages and disadvantages of whatever structure you select.

NOTE – Toy Builder is a fictitious company

Thank you!!!

Answer 1

First of all thank you very much for your concern !!!

Here is the answer of your query regarding the constitution and which form of ownership is most suitable for the toy manufacturing business.

Now let's start one by one and evaluate all the formation starting with Sole Proprietor:

1. Sole Proprietor : The advantage of having sole proprietorship business is one will have full control over the business and dilution of control will not be on stake. But on the other hand in case of death of Proprietor business needs to be either discontinued or transferred.

2.Partnership: The advantage of partnership is business can be start with the minimum formalities and experience and benefit of capital infusion can be obtained. On the other hand alike Corporation, Partnership firm do not have nation wide publicity or reliability.

3. Corporation: The main advantage of Corporation is having continuous Life and share holders are not liable for corporate debts but unlike Sole-Proprietorship business model to establish Corporation is very difficult and costly.

Now come to the Toy business of Jose Rivera i would like to suggest to establish Corporation model which in turn albeit costly in initial phase but in a loner run it will give more and more advantage in form of public fund, continuous life, nation wide publicity and reliability and on top of all Jose will get more recognition of their business through "Corporation" only.

Thank You.