GOODIEBOX BAKERY “GoodieBox” is an “at home” bakery located in the town of Bloom

Question

GOODIEBOX BAKERY

“GoodieBox” is an “at home” bakery located in the town of Bloomsburg, Pennsylvania.

GoodieBox specializes in beautifully iced, mini cakes (personal size.) The bakery was

started four years ago by Pat Taylor, a Bloomsburg University Business Management

student. Pat started the bakery to earn a little extra cash for college expenses.

Pat’s idea for the mini cake was not planned. In fact, Pat was planning to bake a

birthday cake for one roommate, Terry, when the realization occurred that there were

not enough ingredients to make a full-size cake. Rather than getting in the old beat

up Honda Accord and running to Weis Markets for more ingredients, Pat decided to

bake a “mini cake” for Terry. Using an empty coffee can as the cake pan, Pat whipped

up the first “mini cake” Well, Terry loved the cake so much, and told all friends, who told

all their friends, and, well, you can imagine how GoodieBox’s mini cakes became a very

popular item among the college cake-loving crowd!

For the past four years, Pat has been using the kitchen in the Bloomsburg apartment to

bake scrumptious, beautifully iced, mini cakes. However, Pat recently graduated from

Bloomsburg University and is now contemplating doing this as a full-time job, possibly

opening up a “brick-and-mortar” business somewhere in the Bloomsburg area.

As a consultant to Pat, you need to help with this decision. To assist you, please read

and then provide a response to the following questions:

FORMS OF BUSINESS OWNERSHIP COMPONENT

1. If Pat decides to open up a bakery in the Bloomsburg area, will the current form

of ownership (sole proprietorship) need to change? If so, why? What other form

of ownership would you suggest? State at least three reasons

Explanation / Answer

Answer: Yes the current form of ownership would change for the simple reason that for the expansion some venture capatalist would invest in his business and then due to this investment the ownership would be with two persons or even more. It would be more like a partnership.

I would suggest limited liability partnership to him as this will reduce the unwanted and undue risk from him and then for him the business would be more fruitful.

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