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Kanda developed a range of reeipes for diabetic frozen food. He was selling the frozen food on Shoppe websites and he has been very successful, This year there has been substantial increase in the demand of his food. Tan, a competitor offers similar line of business but specializes in Chinese cuisine. Both decided to work together and if this collaboration were to materialize they need more capital to rent a larger premise for kitchen, to upgrade cooking appliances and to hire additional workers. Kanda and Tan approached you for advice on the best business organization for their business, bearing in mind that they plan to avoid significant levels of formality and they want to be able to run their affairs in private. They are keen to protect their personal assets in the event that the business fails. In addition, they plan to raise capital from outside sources and they wish to recruit employces.
Based on the above situation:
a) Discuss the advantages and limitations of various business organizations and the extent the business organizations fulfil all, or some, of the above aims,
b) Advise Kanda and Tan as to which business organization would be most suitable for their business,
c) Kanda and Tan are concerned with whether they may get back the money that they contributed to the business if one day they decide to stop trading. Explain how a company may be wound up and the prospect on whether Kanda and Tan may receive their investment after the liquidation.
On January 15th, Sweet Charles ("SC", a pie baking company owned and operated by Charles) came to an oral agreement with Tarts-R-Us ("TRU", a bakery owned and operated by Ursula) to supply the bakery with one hundred special heart-shaped pies at a pr..
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