Organizing business as a sole proprietorship


Case Study:

Shania Jackson is a mature Christian thinking of opening a Christian coffeehouse near Denver, Colorado. Her husband, Marvin, is open to making a contribution of capital to the business, but he has no interest in participating in its operation or management.

Shania's sister, Kelsey, is a new Christian who has told Shania that she's been looking for an excuse to get out of the house and would love to be a part of the business. Kelsey's husband, a non-Christian, opposes his wife's involvement and has told her that he expects her to remain a stay-at-home mom to their two children, ages 13 and 15.

Shania's neighbor, Carlos, is a non-Christian who has also expressed an interest in participating in the business as a way to earn extra income. Carlos thinks the "Christian thing" has potential with all the big churches in the area, including a Mormon temple and a large Kingdom Hall of Jehovah's Witnesses.

In researching the coffee business, Shania comes across a few franchise opportunities, some of which would require her to adopt the franchise name and trade dress, as well as others that would only require her to move into a turn-key facility and agree to purchase a certain volume of product every month for a period of at least 10 years. Both types of franchises offer training for her and any staff she might hire.

Shania has considered organizing her business as a sole proprietorship, a partnership of some sort, a corporation of some sort, an LLC, or even a joint venture. She is thinking of calling the business "The Gathering Place."

Complete the following steps:

  • Advise Shania on which of the business forms under consideration best accomplishes her business goals. Thoroughly explain the reasons for your recommendation.
  • Advise Shania on whether her company should become a franchise or should open as an independent coffeehouse. Explain your recommendation.
  • Perform a corporate name search at this websiteto determine if the name Shania is considering is available for use in the State of Colorado. Also assess whether the name is available as a trademark. Even if the name is available, advise Shania on whether it is a good choice. Explain why or why not.
  • Advise Shania on which of the interested persons she should include in her business, why, and in what role(s). If she chooses not to take in a particular party, what reasons should she give each person, if any? Your analysis must include biblical perspectives, such as biblical considerations of marriage and of business relationships with non-believers.

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Business Management: Organizing business as a sole proprietorship
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