Wednesday, January 9, 2019
Business Ownership Choices Ã¢â¬ 10 Mark Question Essay
hunting watch Designs was established five course of instruction ago by Amita Patel and her friend, Yi Ling, after they two finished Art and Design courses. hunting watch Designs is run as a fusion between the two women. There argon currently no opposite partners.Amita and Yi execute hand drawn designs in their studio which is located on an industrial estate. These designs ar and then sent to a nonher vocation where a com ar come iner is used to put the designs onto transfers.When Amita and Yi masturbate these transfers back, they ar put onto mugs and plates purchased from a separate pottery comp whatever.Orion Designs then considers the finished mugs and plates as souvenirs.Orion Designs has been reservation increased profits each year. Amita and Yi this instant postulate to expand the line of work. They could increase the range of items onto which they put the transfers (eg. Mousemats), or perform wholly of the production processes at Orion Designs.Amita and Yi be aware of the risks involved in expanding the business. rase though they founder already invested their throw nones in the business, there whitethorn be a consume for special finance as well as to a greater extent employees.Actual QuestionAmita and Yi look at recently had a meeting with a local business advisor about their plan for the expansion of Orion Designs.They were devoted three possible elections* Option 1- stay on as they are* Option 2- include on additional partners* Option 3 turn the business into a individual(a) exceptional company.Recommend the best option for Amita and Yi, explaining why the other options were not chosen. understructureAmita and Yi are two friends who keep a business that puts designs onto pottery. They are currently a partnership but are hard to work out whether they should change the possession type of their business in pronounce to expand.Paragraph 1 (Analysis of Option 1 and Option 2)The business is currently a partnership so A mita and Yi both abide straight-out liability. This means they would have to sell their personal assets if the business went into debt. If they took option 1 this dis receipts would still remain. Option 1 is low risk as they are not doing anything different but it qualification be difficult for them to expand as they wont have any additional finance. If they know people who want to join their business then they could agree on additional partners, these would have unlimited liability as well. This would bring gold into the business but these new partners mightiness want a say in running the business and it might not be what Amita and Yi want, this could lead to arguments.Paragraph 2 (Analysis of Option 3)As a hush-hush limited company, the owners of Orion Designs have the benefits of limited liability so they support however lose the amount of money that they invested in the company. So the owners of the business would have more security. If Orion Designs want to expand and have new ranges then they will need more money, if they become ltd they could raise the money they need by having shareholders. This would be an advantage to Orion Designs. At the moment wholly profits go to Amita and Yi, if they were to become a private limited company they would ascertain less profits themselves as they would have to pay dividends to all shareholders.ConclusionAt the moment there are scarce two partners, Amita and Yi so they will be limited in the amount of money they can invest but they can make all the decisions themselves. If it were to become a ltd then other shareholders would be up to(p) to make decisions and Amita and Yi would lose some promise of their business. There are also sanctioned formalities involves in becoming a ltd which would take time and cost money.In order to secure the future of the business and expand I recommend that Orion Designs takes option 2 and stays as a partnership but invites other partners to invest in the business. This wa y they get the advantage of more capital in the business but do not have to spend a slew of time and money becoming an ltd.