1. Name of business: Jammies
2. Location of principal office: California
3. Type of organization: Sole proprietorship
This type of business organization is chosen as the business would be started from the home garage and products would be produced in small facility. The potential customers for the product would be connoisseurs of food who are also health conscious and would not mind paying a premium for getting pure products (Jams).
4. Advantages and Disadvantages
Advantages:
• Sole proprietorship is easy to set up.
• There is full control with the entrepreneur. As a result all profits goes into his pocket which motivates him to make the business success and earn more profit.
• All decisions are taken by single person. This reduces ambiguity and reduces the time taken for planning and execution.
• There is flexibility in business operations as and when required by the proprietor
• There is low cost of formation. The management is also inexpensive as functional experts are engaged for various functional areas.
• The dissolution of business is easier and up to the disposal of the owner.
Disadvantages:
• There is a limitation on the financial resources which can be committed by the entrepreneur.
• The liability of proprietor is unlimited
• The scope of sole proprietorship is usually small scale as a result of which economies of scale cannot be enjoyed.
5. Legal requirements:
Since the business has different name than the individuals’ name, a Fictitious Business Name Statement must be filed with the county. No formation documents are required to be filed with the Secretary of State.
References:
Sole Proprietorship General Format. (n.d). Retrieved from
https://business.ca.gov/StartaBusiness/DefiningaBusiness/SoleProprietorship.aspx
Kumar, C. (n.d). What are the advantages and disadvantages of Sole Proprietor Form of Business? Retrieved from
https://www.preservearticles.com/201101153393/advantages-and-disadvantages-of-sole-proprietor-form-of-business.html
In two to three paragraphs, provide the following information about the business that you created in Week 1.
1. Based on the type of product your business will offer, discuss potential product liability issues and how your company can avoid these potential risks.
2. Explain your plans to handle sales contracts and warranties.
a.What are the advantages and disadvantages to contracts:
i.including FOB Shipment terms
ii.including FOB Destination terms
b.Will your contracts include FOB Shipment or FOB Destination terms?