Unit 9 P1

Executive Summary
This business report will review the operations and future prospects of Rise and Shine Café. Rise and Shine is owned and operated by Jane King in the hills district specialising in organic coffee and pastry’s. This report will examine the possible legal structures for the business, and present a comparative analysis of these possible options and recommend the most appropriate legal structure for the café.

Possible Legal Structures
Jane King operates a successful café in the Hills district, increased growth in the area, demand for her cafes product and opportunity of a partnership has led to a review of the legal structure of the business. Jane King can continue to operate her café as a sole trader or the entrepreneur can
There with some exceptions to the number of partners depending on the profession but none of which will affect Jane King’s businesses. A partnership is very similar to a sole trader and within a partnership there may be a partner/s who contribute financially to the business but takes no part in its operation and this is known as a limited partnership.

Question 2
Rise and Shine Café is presently operating as a sole trader under the ownership of Jane King, however the prospect of establishing a partnership with her brother has arisen. Table 2.1 and Table 2.2 describes the advantages and disadvantage of operating as a sole trader and as a partnership respectively.

Advantages
¬ Low cost of entry – Establishment costs of business are relatively low
¬ Complete control - Owner has total control over the management , operation and direction of business without the interference of others
¬ No partner disputes – As business is owned by one individual there is no need to confer with others and accommodate to their needs and opinions
¬ No tax on profits , only on personal income – Sole traders retain all profits of the business and are not required to pay taxes on profits but only on their personal
A comparative analysis of the advantages and disadvantages of a sole trader and partnership have been completed. Based on this analysis , it is recommended at the current time that Jane King continues to operate Rise and Shine Café as a sole trader instead of establishing a partnership with her brother Justin.

It is most appropriate for Jane King to operate her business as a sole trader as there will be no disagreements in the management of the business as well as within her family as the partnership would have been with her brother. Disputes in the management of a business would have also affected the employees of the business as they might feel they have divided loyalty. This leads to confusion in authority of the business drawing away from its focus on their customer service which the café is renowned for.

Operating Rise and Shine café under the ownership of a sole trader is most appropriate for the business as Jane King can solely retain all profits from the business and not pay tax on them only on her personal income. By operating as a sole trader she is only liable for her own personal debts instead of those of her partner if the business was operated as a