Pros And Cons Of Acme Fireworks
ACME Fireworks Recommendation
Robert Morgan
BUS 311
Michael Huang
October 06, 2014
ACME Fireworks Recommendation
As a company grows it may become necessary to change the businesses’ entity and the way in which it conducts business. ACME Fireworks has received inquiries from several large retailers that will enable the business to expand. In order to accommodate this expansion, ACME must consider hiring more employees. The owner is concerned about his personal liability should the company fall short of funds. In order to determine which entity best suits the company’s needs, we must first review all the risks and liabilities associated with production, sale, transport and storage of fireworks.
ACME Fireworks has several options to choose from and, each has its own sets of pros and cons. These choices include such entities such as: a partnership, a corporation, or a limited liability company (LLC). Based upon the information provided, ACME Fireworks would most likely benefit by transitioning into a LLC. This type of entity will provide the control of a …show more content…
It is important to understand the differences associated with the different entities when choosing what best fits your organization. Whether choosing a Sole Proprietorship, a Partnership, a Corporation or a Limited Liability Company, it is important to assess all the risks associated with the nature of the business. Currently, ACME Fireworks operates out of a garage and the owner enjoys complete autonomy over operations. Operating as a Sole Proprietorship, the business and the owner remain one and the same. This provides the highest risk of loss to personal assets. “The disadvantage is that a sole proprietor has limited options for raising capital and no limits on liability for business debts; thus if the business does not fare well, the sole proprietor can face personal bankruptcy,” (Rogers, S.
Robert Morgan
BUS 311
Michael Huang
October 06, 2014
ACME Fireworks Recommendation
As a company grows it may become necessary to change the businesses’ entity and the way in which it conducts business. ACME Fireworks has received inquiries from several large retailers that will enable the business to expand. In order to accommodate this expansion, ACME must consider hiring more employees. The owner is concerned about his personal liability should the company fall short of funds. In order to determine which entity best suits the company’s needs, we must first review all the risks and liabilities associated with production, sale, transport and storage of fireworks.
ACME Fireworks has several options to choose from and, each has its own sets of pros and cons. These choices include such entities such as: a partnership, a corporation, or a limited liability company (LLC). Based upon the information provided, ACME Fireworks would most likely benefit by transitioning into a LLC. This type of entity will provide the control of a …show more content…
It is important to understand the differences associated with the different entities when choosing what best fits your organization. Whether choosing a Sole Proprietorship, a Partnership, a Corporation or a Limited Liability Company, it is important to assess all the risks associated with the nature of the business. Currently, ACME Fireworks operates out of a garage and the owner enjoys complete autonomy over operations. Operating as a Sole Proprietorship, the business and the owner remain one and the same. This provides the highest risk of loss to personal assets. “The disadvantage is that a sole proprietor has limited options for raising capital and no limits on liability for business debts; thus if the business does not fare well, the sole proprietor can face personal bankruptcy,” (Rogers, S.