CASE STUDY 2 Introduction The McGee Cake Company, owned by Doc and Lyn McGee, has been a sole proprietorship company since its inception in 2005 (Ross, Westerfield & Jordan, 2013, p. 18). A sole proprietorship “is the least regulated form of organization” and has allowed the McGee's to run their company In terms of taxes the McGee's currently report their personal and business taxes as one. Under a limited liability company they will no longer be able to claim their business income on their personal filings; separate tax returns would have to be filed for both their personal income and their business income (Cromwell, n.d., n.p.). Moreover, the McGee's would have to file documentation with the state prior to their company being able to claim limited liability status. The taxes and state filing issues, in my professional opinion, should not be viewed as detractors. The benefits the company will reap (e.g., ability to raise capital) certainly outweigh the annual taxation preparation and filing with the state to 'establish' the limited liability company. CASE STUDY 5 Advantages and Disadvantages of Changing from a Sole Proprietorship to a Corporation Some of the advantages of forming a corporation are, in contrast to sole proprietorship, “owner-ship [of a corporation] can be readily transferred” (Ross, Westerfield & Jordan, 2013, pp. 5-6). Also, like a limited liability company, a corporation has “limited liability for the company's debts and [stockholders] can only lose what they have invested” (Ross,
marketing includes all the advertising methods like print ads, TV commercials, brochures and billboards; digital marketing means promoting a brand/company via the Internet, thus it refers to social networking presence, online advertising (Google Adwords, Facebook Ads, Twitter Ads, Youtube videos, etc.), blogs and websites. With traditional marketing companies directly target and find customers, while through online marketing their objective is to have people find them. The success of a digital marketing…
Case Solutions Fundamentals of Corporate Finance Ross, Westerfield, and Jordan 9th edition CHAPTER 1 THE McGEE CAKE COMPANY 1. The advantages to a LLC are: 1) Reduction of personal liability. A sole proprietor has unlimited liability, which can include the potential loss of all personal assets. 2) Taxes. Forming an LLC may mean that more expenses can be considered business expenses and be deducted from the company’s income. 3) Improved credibility. The business may have…
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