Reference no: EM133170856
Background for an assignment here is the scenario: You and your team serve as consultants to business owners who need help in deciding which legal form of ownership is best for them. You are currently working with one client. You will evaluate possible legal forms of organization, consider the pluses and minuses of the alternatives, and then decide on a recommendation. Client 1: Rainforest AdventuresRainforest Adventures offers one-day and multiday tours of several locations in Australia. It works both with tourists and with study groups, and its clientele varies from people who want a relaxing experience away from hectic urban life to those who are keenly interested in the exotic environment. The business is dedicated to the preservation of Australia's tropical and wetland preserves. Its guides have many years of experience leading tourists through the rainforests, particularly at night when they come alive. Rainforest Adventures was started three years ago by Courtney Kennedy, who has fifteen years of experience in the ecotourism industry. She runs the business as a sole proprietorship but is considering changing forms of business. (She does not want to incorporate). In questioning her, you found out the following: Kennedy is dedicated to preserving the Australian wetlands and sees her business as a way of encouraging people to support conservation efforts. However, her guides have displayed an "it's just-a-job" attitude, have become increasingly undependable, and are unwilling to share her commitment. Still, Kennedy has several trusted friends who not only have years of experience as guides but who also share her enthusiasm for environmental preservation. She is optimistic that they would be willing to join her in the business. She dreams of expanding her business to offer classes on the ecology of the rainforest but does not have enough cash, and she is afraid that a loan application will be turned down by the bank.
Options
Because Kennedy does not want to incorporate, she is left with two options: to continue doing business as a sole proprietorship or to find one or more individuals to join her in a partnership. You must first discuss the pros and cons of staying in a sole proprietorship as it applies to her situation. Be thorough in your explanation. Then you will discuss 2 types of partnerships as they relate to her business as well as partnership agreements. Then you will recommend which of these options she should choose and why. Be thorough in your explanations
1: Discuss the multiple pros and cons of a partnership and how a partnership could be applied to Courtney's business. Be sure your explanation includes the importance of a partnership agreement and the difference between a limited partnership and a general partnership
2: Discuss the multiple pros and cons of a limited liability company as it applies to Courtney's business.
3: Decide whether she should stay a sole proprietorship, change to a partnership or change to a limited liability company. Explain why you chose that option.