Reference no: EM132704210

Read this scenario and answer the questions in each of the three sections below.

You have been with BigBiz, Inc. for several years now, in many capacities, working your way up to project manager, the last step before becoming a division manager. That is too long to wait and there is a long line ahead of you. Most of your experience has been in food services, most recently catering. You believe there is a market for an independent catering and event planning business in your region. You do not have a non-compete agreement with BigBiz, so you are free to seek business as long as you do not use BigBiz's client list or, for the next year, hire away employees who have worked under your management. You have already lined up customers and plan to expand rapidly over the next five years and grow a business that you may ultimately sell or pass on to your children. You are married with three pre-teen children. Beyond these facts, which you must include in your discussion, you may make up your own assumptions in response to the assignment questions.

With respect to your proposed business venture for an independent catering and event planning business, complete the following section.
Write a one paragraph response to each of factors 1 through 5. (Completed)

1. Licenses and Permits:
Food related regulations like FDA (Food and drug administration) USDA (US department of agriculture). It has to comply with federal and state employee laws, Food service license is obtained based on classification and size of business. Employee identification number and comply with state and central federal laws.
2. Ownership:
Incorporation can help in protection of personal assets from liability. Have a separate LLP for each location. It is simple and does not require board of directors or shareholder meetings.
3. Management structure:
General manager: Day-to-Day operations including hiring, training, and maintaining restaurant in proper condition.
Front of house staff: Restaurant dining area, including setup service, waiting for customers, and interacting with kitchen staff.
Executive staff: Back of house operations, Hiring and training kitchen staff, creating menu items, sourcing, and purchasing food, determine prices of meals.
4. Skills: Hire staff full time, catering business needs additional servers and people who help in food preparation, Hire people as independent contractors than employees.
5. Capital: Choose business partnerships with people in your own network, not giving away too much equity, instead of offering stake we can repay the debt with good interest rate.

Second Part I Need Help With: Applying the facts you are given in the assignment and your responses to factors 1 through 5, prepare an outline of entity options. For each business entity option listed below, briefly answer factors 6 through 9:
• Sole Proprietorship
o Personal liability:
o Taxation:
o Transfer of Ownership:
o Complexity:

• General Partnership
o Personal liability:
o Taxation:
o Transfer of Ownership:
o Complexity:

• Limited Liability Company (LLC)
o Personal liability:
o Taxation:
o Transfer of Ownership:
o Complexity:

• "Subchapter C" Corporation
o Personal liability:
o Taxation:
o Transfer of Ownership:
o Complexity:

• "Subchapter S" Corporation
o Personal liability:
o Taxation:
o Transfer of Ownership:
o Complexity:

• Personal liability - What will be your personal liability for the business's financial obligations to lenders, customers, vendors and other third parties?
• Taxation - How will your business be taxed?
• Transfer of Ownership - How easy will it be to transfer ownership to family members or a purchase of your business?
• Complexity - How complex is the process of forming the entity and of remaining compliant with laws and regulations?