MCGEE Cake Company Essay

insertionThe McGee Cake high society has been in byplay since early 2005. The company is a restore proprietorship. They produce a variety of skillful line cakes and other cake including cheesecake, gamboge pound cake, and double-iced, double-chocolate cake. In the past some(prenominal) years, the company has experienced gross revenue increases collect to features in magazines and this led to the company receiving orders from completely over the world. Doc and Lyn McGee twain had fixing jobs and formed the company mainly ascrib fitted to step upside interest. However, with the increase in sales and demand for their production worldwide they both quite their regular jobs and hired supernumerary staff to handle the influx of the modern demands. The company still faced issues with immediate payment flow and capacity and the company keep to produce as many product as its assets would allow. The demand for the goods and services bear become to great for their current ba g and the company is looking for task options (Ross, Westerfield, & adenine Jordan, 2013).As menti atomic number 53d previously, the company is currently operate as a fix proprietorship. jibe to our text, a sole proprietorship is a agate line owned by one person and its the simplest business to set out and it the least regulated form of organization. The McGees keep all the profits in this type of business. However, the possessor has un check indebtedness which kernel creditors tush look beyond business assets to personalized assets for payment of debts. fillet of sole proprietorship ar modified to the owners life span which means which in the end h angstromers the business able to exploit sweet opportunities (Ross, Westerfield, & Jordan, 2013, p. 14). A limited financial obligation pot (LLC) operates and is taxed standardised a compact but stay fresh the limited liability for owners, basically make it a hybrid of a compact and mess. The Internal Revenue Serv ice maintains charge of LLC operations and if a business does not meet certain criteria it pass on be faced with double taxation penalties (Ross, Westerfield, & Jordan, 2013, p. 6).There are several advantages and disadvantages of ever-changing the McGee Cake Company from a sole proprietorship to a corporation. A corporation is the most important form of business in the Unites States. Its a business created as a distinct heavy entity composed of one of more individuals or entities. Personal assets are protected from lawsuits and debt collections. Corporations quarter borrow money, be sued, and even be a general or limited partner in a partnership owning stock in other corporations. A disadvantage is a corporation is jural person it is not liberate from taxes. The corporation profits are taxed twice at a time at the corporate level when they are earned and again at the personal level when they are paid out (Ross, Westerfield, & Jordan, 2013, pp. 5-6). ConclusionBased on the information provided by the McGee Cake Company and the recent expansion of their business. I presuppose 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 trigger off up costs for a LLC will not break the bank and they can be easy to operate (www.sba.gov/ pith/limited-liability-corporation-llc).ReferencesRoss, S. A., Westerfield, R. W., & Jordan, B. D. (2013). Fundamentals of Corporate Finance. overbold York, NY, USA McGraw-Hill Irwin.www.sba.gov/content/limited-liability-corporation-llc. (n.d.). Retrieved May 10, 2014, fromU.S. secondary Business Administration www.sba.gov