Choosing the Right Business Structure for Your Bakery Venture

Sally explores different business ownership types for her bakery. She consults local business owners: Dave on sole proprietorship, Damian and Bill on partnerships, and Ted on corporations. Each shares advantages and disadvantages. Sally decides to start with a sole proprietorship, aiming for future growth.

What is one of the main reasons Sally is unsure about which business ownership to choose?

• She doesn't have enough money.

• She is unsure about the legal requirements.

• She wants to understand the pros and cons of each type.

• She is worried about competition.

Which of the following is an advantage of a sole proprietorship according to Dave?

• Tax-free profits

• Shared responsibilities

• Easy to start and end

• Limited liability

What is a significant disadvantage of a sole proprietorship mentioned by Dave?

• Limited liability

• Complex tax filing

• Unlimited liability

• High initial costs

What is one advantage of a partnership as explained by Damian and Bill?

• Unlimited liability

• Pooling of financial resources

• Single decision-maker

• No need for agreements

According to Damian and Bill, what is a potential issue in partnerships?

• Disagreements among partners

• Lack of financial resources

• Difficulty in hiring employees

• High tax rates

What is a key advantage of a corporation mentioned by Ted?

• No need for transparency

• Easy to terminate

• Unlimited liability

• Limited liability

What is a disadvantage of a corporation according to Ted?

• Single tax on profits

• High initial costs

• Limited growth potential

• No separation between owners and managers

How does Ted describe the process of changing ownership in a corporation?

• Involves dissolving the company

• Easy by selling stock

• Requires government approval

• Very complicated

What decision does Sally make about her bakery's business structure?

• Franchise

• Partnership

• Corporation

• Sole proprietorship

What future possibility does Sally consider for her bakery?

• Closing down after a few years

• Becoming a non-profit

• Turning into a corporation or franchise

• Merging with another bakery