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Option #1 Assume you are advising John. Given the background information, which of the following business structures would you advise him (them) to use in order to operate the new bistro? a) A sole proprietorship owned by John (Ringo being an employee) b) A partnership (John and Ringo OR John, Ringo, and Paul) c) A joint venture (among John, Ringo, and Paul) d) A corporation (owned by John, Ringo, and/or Paul) Explain your answer. Please note that any of the four suggested structures are possible – no one structure is absolutely correct.

Even though it’s simpler and much cheaper to form a sole proprietorship or partnership, I would advise John to form a corporation jointly owned and operated by himself, Ringo, and Paul. John has already seen the benefits of running a simple business as a sole proprietor. However, he had to invest his own finances and take on all the liabilities. This was a good option since he was the sole owner of that business. Since the new venture involves other parties, a corporation, although more costly and requires a lot more paperwork, is advantageous as it will separate and protect Johns’s (and the other parties) personal assets from the business assets, keeping him from being liable for any partner’s debts. In addition, it is easier to raise capital for a corporation and the new venture will definitely need funds for start-up costs, remodeling the location, licenses, and permits, kitchen and cooking equipment and much more. All three individuals bring their own skill set to the business. Giving them ownership and shares in the corporation will make them equally vested into the business. John’s asset is the number of years of management experience in the food industry, Ringo’s value is that of a skilled chef, and Paul is able to provide the crucial real estate for the business. In the event one owner leaves the business or passes away, because a corporation has an unlimited life span, the corporation will continue to exist. Corporations also allow transferring ownership. In today's competitive food industry, your business name can become one of your most valuable assets. Thus, it is important to protect your business name of which registering a corporation allows you to do. The last thing John wants is to lose sales if another company opened up using the same name....