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Proprietor of a popular and profitable restaurant

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Allen Brennan was talking to Scott Larson. Both were hospitality professionals and had been friends for more than 15 years. Allen had an idea for starting a new restaurant and wanted Scott to partner with him in its development and operation.

Scott was already the sole proprietor of a popular and profitable restaurant. Allen had recently quit his job as a district manager in a quick-service restaurant chain.

"I don't know," replied Scott. "I'm pretty busy just managing my current shop."

"That's no problem," replied Allen, "I'll manage the new place for us. We'll split the profits 50/50 since you'll be the one putting up all the money for our start-up. You won't have to do anything except cash your monthly checks from all the money we'll make!"

-Assuming you are Scott, how important is the choice of business structure under which the proposed restaurant would operate? Explain your answer.

-What affect could the choice of business structure chosen for the start-up restaurant have on Scott's current restaurant?

Reference no: EM133107943

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