MCGEE Cake Company Essay

IntroductionThe McGee cover ships community has been in origin since early 2005. The telephoner is a resole proprietary. They produce a variety of full line cakes and remainser(a) cake including cheesecake, lemon pound cake, and double-iced, double-chocolate cake. In the past several years, the company has see sales developments due to features in magazines and this guide to the company receiving orders from all over the world. atomic number 101 and Lyn McGee both had uninterrupted jobs and formed the company mainly due to outside interest. However, with the increase in sales and acquire for their output worldwide they both quite their regular jobs and hired additional staff to process the influx of the recent demands. The company mollify faced issues with cash flow and substance and the company continued to produce as many product as its assets would allow. The demand for the goods and services have become to great for their current infrastructure and the company i s come outing at for disdain options (Ross, Westerfield, & Jordan, 2013).As mentioned previously, the company is soon operating as a sole proprietary. According to our text, a sole proprietorship is a business owned by one individual and its the simplest business to start and it the least regulated form of organization. The McGees keep all the remuneration in this caseful of business. However, the owner has immeasurable liability which means creditors can look beyond business assets to personal assets for stipend of debts. Sole proprietorship are particular(a) to the owners life duo which means which in the end hampers the business able to exploit new opportunities (Ross, Westerfield, & Jordan, 2013, p. 14). A limited liability bow window (LLC) operates and is taxed deal a union but sustain the limited liability for owners, basically devising it a hybrid of a first mateship and corporation. The Internal Revenue Service maintains vigilance of LLC operations and i f a business does non meet certain criteria it will be faced with double taxation penalties (Ross, Westerfield, & Jordan, 2013, p. 6).thither are several advantages and impairments of changing the McGee Cake Company from a sole proprietorship to a corporation. A corporation is the nearly important form of business in the Unites States. Its a business created as a distinct legal entity serene of one of more individuals orentities. personal assets are protected from lawsuits and debt collections. Corporations can adopt money, be sued, and even be a general or limited partner in a partnership owning decline in other corporations. A disadvantage is a corporation is legal person it is not exempt from taxes. The corporation profits are taxed twice once at the corporate train when they are gain and again at the personal level when they are paid out (Ross, Westerfield, & Jordan, 2013, pp. 5-6). final stageBased on the information provided by the McGee Cake Company and the recent am plification of their business. I think the best type of business for their new growth would be a limited liability corporation (LLC). In a LLC, members are protected from personal liability for business decisions or actions of the LLC. This means that if the LLC incurs debt or is sued, members personal assets are usually exempt which is similar to the liability protections afforded to shareholders of a corporation. Lastly, the start up be for a LLC will not proceed the bank and they can be loose to operate (www.sba.gov/content/limited-liability-corporation-llc).ReferencesRoss, S. A., Westerfield, R. W., & Jordan, B. D. (2013). Fundamentals of incorporate Finance.New York, NY, USA McGraw-Hill Irwin.www.sba.gov/content/limited-liability-corporation-llc. (n.d.). Retrieved whitethorn 10, 2014, fromU.S. Small Business Administration www.sba.gov