Reference no: EM13723694
After working for a technology company for many years, Christine decides to leave to open her own business. She and her friend, Emily, developed a product to boost cell phone signals to improve call quality.
They secured a patent on the device, did market research to determine that there are domestic and international markets for the product and have already lined up some orders_ Christine and Emily are undecided on the structure that would be best suited for their new business, so they decide to open as general partnership. They have heard about sole proprietorships, partnerships, corporations and limited liability companies, but they do not think they know enough to choose the right one, so they settle on a partnership in Suffolk County, New York.
Christine and Emily are equal partners. Christine is in charge of production and research and development while Emily handles marketing and sales for the business. They hired an office manager and use an accountant and attorney on an as needed basis
After a year of operation, the business, Booster Cell, has sales of domestic sales of $350,000, but the owners have had difficulty breaking into the highly competitive international market A lead provided to them by their financial advisor results in proposal from a company in the United Kingdom to market their products worldwide.
Projected sales from the new marketing campaign are beyond the production capacity of Booster Cell. Eerily and Christine must expand their production facility, but to do so will require additional capital that neither of them can afford to take from their personal assets.
The owners of Booster Cell must raise capital, but they are concerned about their personal risk if the partnership takes on new debt and the projected sales do not materialize. They also are reluctant to take on new owners because they are afraid it will damage their working relationship and dilute their control over the business.
Summarize what their business is and identify and summarize the problem they are facing. after that, choose which type of business they should pick and explain why.
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