Question

Choosing a Form of Ownership Please respond to the following with a 250-300 word response:

From the e-Activity, describe the most appropriate form of ownership for your new franchise based on your current financial situation. Provide specific examples to support your response. Assume the form of your new business will be a partnership (if you have not already done so). Discuss the types of conflicts that may arise and how you could prevent them from arising in the first place.

e-activity link: http://www.worldfranchising.com/

Answer 1

The company structure which has limited liability corporation structure will be best suited to handle financial crisis. There are multiple or single owner in the limited liability corporation and the owners get the scope to be equally involved in the decision making and management of the company’s business. There is no fear of double taxation which any general partnership has to face or any other kind of corporation needs to pay.

Partnership business structure is the cheapest and the simplest kind of business structure which requires low set up and maintenance costs. Of the four main business structures, having a partnership is one of the simplest and cheapest business types to set up and maintain. In the partnership, the partners who are the owners contribute labour, money or skills in the business. The profits and losses earned by the company are equally shared among the partners.

Conflicts in partnership may arise in relation to decision making, money sharing, and values of business among the partners. Meetings and discussions of what changes to be implemented by involving every partner will resolve misunderstanding and conflicts. Suitable communication and information provided to every partner about day to day activities, performances, revenue collected, profit earned will help in dealing with conflicts better. Detailing and designating roles and responsibilities of every partner can prevent conflict. Agreements signed and sent to every partner will prevent conflicts and disagreement in partnership.