Reference no: EM133247147

During the COVID-19 pandemic, the Singapore government announced various precautionary measures, amid a spike in COVID-19 community cases. As a result, hawkers who relied on footfall have experienced a significant decrease in their business.

As a group, you decided to help these hawkers as well as earn some extra income by setting up a Facebook page to introduce hawkers and to help them connect with potential customers. As part of your service, you intend to take photographs and videos of the hawkers, write interesting descriptions and articles about each hawker and its menu and source for delivery riders. For every order made on your Facebook page, your group intends to charge a small commission for the services offered via the Facebook page.

However, there is no firm plan yet to offer this service on a regular basis. As one of your group members said, it really depends on the demand and whether each of you have enough time to do it regularly, especially if there are complex regulatory requirements on an ongoing business. Some of your group members noted that there are various other online platforms and apps offering food delivery services. Such competitive rivalry and some uncertainty over the duration of government measures relating to the "reopening" of Singapore may result in an unprofitable business. Your group members are worried about personal liability in the event of such losses. You are also concerned about how to allocate responsibilities within your group for management and control of this proposed service.

At the same time, your group is excited about future growth prospects, especially if there are opportunities relating to government funding and support for start-ups and seeking additional investors to grow this business. Some group members have even brainstormed on possible ideas to offer a subscription plan for hawkers and customers, and to hire employees to manage the social media marketing and delivery teams, as part of the growth prospects of this service.

Question 1

(a) State (i) whether the scenario above constitutes a "business" and (ii) the importance of determining whether it constitutes a "business". In your answer, you should list some of the key factors that are relevant to the definition of "business". Support your answers with reasons and examples.

(b) Assume that your group agrees that the scenario above constitutes a "business". explain why a limited liability partnership is an appropriate form of business. Support your answer with reasons and details, taking into account the advantages and disadvantages (and the key characteristics) of your choice of business organisation.