Reference no: EM133234070

In early 2013, Peter Johnson and Emily Victoria formed the Victoria Sponge Cake Company. The company produced a full line of cakes, and its specialties included sponge cake, lemon pound cake, double iced, and double chocolate cake. The couple formed the company as an outside interest, and both continued to work at their current jobs. Peter did all the baking, and Emily handled the marketing and distribution. With good product quality and a sound marketing plan, the company grew rapidly. In early 2018, the company was featured in a widely distributed entrepreneurial magazine. Later that year, the company was featured in Gourmet Desserts, a leading specialty food magazine. After the article appeared in Gourmet Desserts, sales exploded, and the company began receiving orders from all over the world. Because of the increased sales, Peter left his job, followed shortly by Emily. The company hired additional workers to meet demand. Unfortunately, the fast growth experienced by the company led to cash flow and capacity problems. The company is currently producing as many cakes as possible with the assets it owns, but demand for its cakes is still growing. Further, the company has been approached by a national supermarket chain with a proposal to put four of its cakes in all of the chain's stores, and a national restaurant chain has contacted the company about selling Victoria cakes in its restaurants. The restaurant would sell the cakes without a brand name. Peter and Emily have operated the company as a sole proprietorship. Assume that you are a business consultant and they have approached you to get your advice to manage and direct the company's growth. Specifically, they have asked you to answer the following questions; 1. What are the advantages and disadvantages of changing the organization from a sole proprietorship to a corporation? Discuss 2. Ultimately, what action would you recommend the company undertake? Why