Case Study: Starting and Naming a Business
Starting, naming and managing a business can be difficult. One has to decide how to organize the business, what to name, and who to bring in to help maintain it. Addressing these challenges can be confusing if one is unsure of the different possibilities, such as sole proprietorship vs. joint venture. However, with a little understanding in this department and a little guidance from Scripture, which provides the right perspective on how manage a business, one can approach the process with confidence. This paper will discuss the case of Shania and her plan for a Christian coffeehouse that she wants to name The Gathering Place.
Setting up the Business
If Shania’s husband Marvin is interested in being an investor in the business, the best entity to organize under would be a limited partnership. A limited partnership allows there to be a general partner, who manages the business—this would be Shania—and a silent partner, who simply acts as an investor—this would be her husband. The partnership allows for limited liability benefits for the limited partner, but not for the general partner, who can be sued by creditors for instance. The limited partner cannot incur obligations on the part of the partnership (Kenton, 2019). The limited partnership would be the best option for Shania’s business so long as Marvin decides to become an investor in the business.
Setting up the business as a sole proprietorship would be the simplest way to go about it, if the husband decides against being an investor. However, there is risk associated with sole proprietorships—as there is, of course, with being a general partner. If Shania wants to minimize her risk, she might consider organizing the business as an LLC, which would limit her liability; however, she would need to establish and register the Articles of Organization with her state (Murray, 2019a). The Articles typically require a description of the company, the name of the person managing it, the name of the registered agent who sends and receives official paperwork for the LLC, the address and the organizer (Murray, 2019a). Shania can set up the company as a single member LLC (SMLLC), which would mean it is taxed as a sole proprietorship but that it retains the benefits of an LLC (Murray, 2019b). The other options—a joint venture or a corporation—do not make sense for what Shania is trying to do since she is the only one who is going to be running the company. It is unlikely that a joint venture operation would be possible with one of the other Christian organizations in the area, as they compete amongst themselves for parishioners, and the Gathering Place coffeehouse is meant to be non-denominational. It is better for it...
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