Ryan, Tamara and Tami have just graduated from the University of Nepal, each with an accounting degree. They are all agreed that self-employment is a more attractive prospect by which they can establish a successful business in which their qualifications will be an asset. They may want to do something together as well as they might not. What are the likely business vehicles that any or all of them may consider adopting and what would you advise them to take into account in choosing the most appropriate vehicle.
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The most appropriate vehicle is Partnership.
- A partnership has a finite life span and must be legally dissolved upon retirement, death, bankruptcy, or whether any partner requests it.
- When there are more investors in a company, the chances of either of these things happening are far higher than if it were a sole proprietorship. In the given case there are three partners, which is an advantage.
- However, a partnership has various advantages and can be considered as a vital form for three of them for a startup.
It is advisable for them to choose partnership as -
- It is easy to set up and has more capital, that can be brought into the business. Partners like Ryan, Tamara and Tami can bring new skills and ideas and also share responsibilities and duties of the business.
- There will be more capital available along with greater borrowing capacity.
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