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A Business Organization Case Study

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Betty can operate her business in various ways, which include a franchise, a sole proprietorship, a corporation, a limited liability company and a partnership. To start with, a limited liability (LLC) company is a business enterprise, which blends the characteristics of a partnership and a sole proprietorship.

This entity gives a limited liability to the shareholders of the company. In which case, if a business goes under during its existence, one can only sue the business as an entity without affecting the legal entity of the individual shareholders. This goes off as a major advantage for this entity (Harold 1983).

On the other hand, when two or more people come together to operate a business, they form a partnership. At start up, or during the operation of the business, each partner contributes an agreed share of the resources required to run the business.

This can be in terms of labor, money, land, and at the end gains a reward depending on an agreed formula. Under the current US laws, a partnership does not pay income tax. However, the shareholders of this entity must file their respective shares of the entity’s profits and losses in their individual tax returns (Cooke 1950).

On its part, a corporation is a legal entity incorporated through registration and with legal rights and liabilities. Corporations are on their own, entities with a board of directors heading them. The other business form, which Betty can undertake, is a franchise. In this business form, a franchisor allows the franchisee to use his trademark and distribute the trademarked goods or services (Cooke 1950).

For a start up business as Betty is intending to operate, a franchise is the most appropriate model to adopt. Here, Betty gets an already established brand name, which would help her a great deal in minimizing losses during the break-even period. As well, almost all franchisors provide business training and technical knowhow to their franchisees. She would access the much-needed knowhow for her startup venture (Gurnick 2011).

It would be necessary for Betty to join hands with other interested investors to operate the business. One of the interested investors is her husband only wants to contribute capital to the business. Another interested person is Erma a non-Christian. Erma, though not Christian, shares Betty’s vision of a “Christian coffee place”, and would provide an invaluable contribution to the business. It is important to point out that the vision of any organization is what drives it and as such, Erma would come in as an essential stakeholder in this venture.

On the other hand, Betty’s sister, Alice comes off as dispassionate and does not identify with the venture’s mission. She lacks the energy that would contribute to the success of the business. It would be suicidal for Betty to accept her solely on the reason that she wants to get out of the house. Betty should explain these reasons to her sister.

The name “The Gathering Place” is most appropriate for the coffeehouse. However, a search at the State of North Carolina’s registry reveals that the name is already in use by a nonprofit organization. For that reason, it would be illegal for her to use the name for trade marking purposes. However, most franchisors already have an established brand name. Betty could choose to use the franchisor’s name for her coffeehouse instead of dwelling on choosing a new one.

References

Cooke, C.A. (1950). Corporation, Trust and Company: A legal History. New York: Oxford University Press.

Gurnick, D. T. (2011). Distribution law of the United States. U.S.: Juris.

Harold, J. B. (1983). The Impact of Limited Liability and Control. Cambridge:Harvard University Press.

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IvyPanda. 2020. "A Business Organization." July 3, 2020. https://ivypanda.com/essays/a-case-study-for-a-business-organization/.

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IvyPanda. (2020) 'A Business Organization'. 3 July.

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