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QUESTION
CASE STUDY
Case Study Three: Jeb and Josh are lifelong friends. Jeb is a wealthy wind-power tycoon, and Josh is an active outdoor enthusiast. They have decided to open a sporting goods store, Arcadia Sports, using Jeb’s considerable financial resources and Josh’s extensive knowledge of all things outdoors. In addition to selling sporting goods, the store will provide whitewater rafting, rock-climbing, and camping excursions. Jeb will not participate in the day-to-day operations of the store or in the excursions. Both Jeb and Josh have agreed to split the profits down the middle. On the first whitewater rafting excursion, a customer named Jane falls off the raft and suffers a severe concussion and permanent damage to her spine. Meanwhile, Jeb’s wind farms are shut down by government regulators, and he goes bankrupt, leaving extensive personal creditors looking to collect. Specifically, the following critical element must be addressed: · Identify the main types of business entities and discuss the advantages and disadvantages of each. Your active participation in this discussion is essential to improving your understanding of the advantages and disadvantages of the various business entities. Actively engaging with your peers will help you complete the remaining critical elements in the third case study for your final submission.
| Subject | Business | Pages | 3 | Style | APA |
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Answer
Case Study
Jed and Josh joint business is considered to be a partnership form of business. This type of business arrangement falls under general partnership since they decided to run the business as co-owners. This type of business is easy to establish since it is dependent on the partners resolve to create a business opportunity (Nechaev & Antipina, 2016). It is vital for general partners to form a partnership agreement in order to secure and protect their investments.
Advantages of Jed and Josh general partnership
Jed and josh joint partnership is considerably easy to establish as it depends with on their determination to start a business (Lupulescu, 2017). This type of business entity is determined by trust between the partners hence less legal interactions. Flexibility is also a significant feature in this type of business arrangement (McQuaid, 2010). It enables Jed to conduct his personal business as their store continues to operate.
Jed and Josh general partnership facilitates the flow of personal income. This type of partnership enables the shareholders to generate direct income compared to other forms of partnerships (McQuaid, 2010). Arguably, general partnership enables the partners to benefit from direct access to the company’s profits and loss.
Disadvantages of Jed and Josh general partnership
As it is easy to create this type of partnership, it is also easier to dissolve the business. Rationally, this is because the partners tend to work without the need of a legal framework. This makes it easier to dissolve the business since there is no need to file a dissolution contracts (Lupulescu, 2017).
Jed and Josh joint business demonstrate that it lacks structure. Unlike other form of partnership, general partnerships, it is evident that structure and responsibilities becomes a dilemma to the partners (McQuaid, 2010). In Jed and Josh case, Jed becomes liable for Josh decisions, thus affecting his profits and perception within the business.
References
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Lupulescu, A. M. (2017). Some considerations on the general partnership. Tribuna Juridică, 7(14), 6-16. McQuaid, R. (2010). Theory of organizational partnerships: partnership advantages, disadvantages and success factors. Nechaev, A., & Antipina, O. (2016). Analysis of the Impact of Taxation of Business Entities on the Innovative Development of the Country. |