1a. Joan wants to open an appliance store. She will lease a large location as a

Q: 1a. Joan wants to open an appliance store. She will lease a large location as a

a) the best suitable option for joan is to start the business as partnership. because she has 50% of the money for the start up and it will be better to have someone by your side when it goes on loss. it is better to lose half than all. b) That her employees would be less likely to stay long term, since sole proprietorships frequently go out of business. c) As a sole proprietorship, apply for a loan from the bank to raise the rest of the money.

ID: 461403 • Letter: 1

Question

1a. Joan wants to open an appliance store. She will lease a large location as a showroom for washers & dryers, refrigerators, televisions, etc. She plans to hire 20 employees, both part time and full time. Joan has enough money to fund about 50% of the startup costs, so she will need to find some way to raise the rest of the money. Joan will need two new delivery trucks. Her equipment needs are substantial; displays, computers, tools, etc. Joan lives in her own house and has two cars. Her personal wealth, beyond the money she has for startup, is $430,000.

Which of the following forms of ownership would be best for Joan?

A) Partnership B) Limited Liability Company C) Professional Association

1b. If Joan decides to start her business as a sole proprietor, then incorporate later on when the business is established, what should be her primary concern?

A) That she will not be able to bring in a partner, limiting her chances to expand the business.

B) That her employees would be less likely to stay long term, since sole proprietorships frequently go out of business.

C) That she will have unlimited personal liability and may become personally liable for business risks.

1c. Which of the following methods would not be a way for Joan to raise the additional 50% of startup money she needs?

A) As a limited partnership, bringing in limited partners who will contribute the needed funds.

B) As a professional association, bringi n several partners who will contribute equal amounts of capital.

C) As a sole proprietorship, apply for a loan from the bank to raise the rest of the money.

Explanation / Answer

the best suitable option for joan is to start the business as partnership. because she has 50% of the money for the start up and it will be better to have someone by your side when it goes on loss. it is better to lose half than all.

That her employees would be less likely to stay long term, since sole proprietorships frequently go out of business.

As a sole proprietorship, apply for a loan from the bank to raise the rest of the money.

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1a. Joan wants to open an appliance store. She will lease a large location as a

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