Business Ownership Choices †10 Mark Question Essay

huntsman Designs was establish five year ago by Amita Patel and her friend, Yi Ling, after they both accurate Art and Design courses. huntsman Designs is run as a partnership between the two women. There are presently no other partners.Amita and Yi create hand drawn designs in their studio which is located on an industrial estate. These designs are then sent to a nonher profession where a computer is used to put the designs onto transfers.When Amita and Yi get these transfers back, they are put onto mugs and plates purchased from a separate pottery company. hunting watch Designs then sells the finished mugs and plates as souvenirs.Orion Designs has been making increased kale each year. Amita and Yi now want to puff away the business. They could increase the range of items onto which they put the transfers (eg. Mousemats), or perform all of the exertion processes at Orion Designs.Amita and Yi are aware of the risks involved in expanding the business. regular(a) though they engender already invested their own money in the business, there may be a need for superfluous finance as well as more employees.Actual QuestionAmita and Yi bind late had a meeting with a local business advisor slightly their plan for the expansion of Orion Designs.They were given three possible options* picking 1- stay as they are* Option 2- take on extra partners* Option 3 turn the business into a private circumscribed company.Recommend the best option for Amita and Yi, explaining why the other options were not chosen. conceptionAmita and Yi are two friends who have a business that puts designs onto pottery. They are currently a partnership tho are trying to work out whether they should change the ownership type of their business in target to expand.paragraph 1 (Analysis of Option 1 and Option 2)The business is currently a partnership so Amita and Yi both have unlimited liability. This means they would have to sell their personal assets if the business went into debt . If they took option 1 this disadvantage would whitewash remain. Option 1 is low risk as they are not doing anything different but it might be difficult for them to expand as they wont have any additional finance. If they know concourse who want to join their business then they could take on additional partners, these would have unlimited liability as well. This would bring money into the business but these new partners might want a say in running the business and it might not be what Amita and Yi want, this could lead to arguments. divide 2 (Analysis of Option 3)As a private limited company, the owners of Orion Designs have the benefits of limited liability so they bunghole only flake out the amount of money that they invested in the company. So the owners of the business would have more security. If Orion Designs want to expand and have new ranges then they get out need more money, if they become ltd they could raise the money they need by having shareholders. This would be an advantage to Orion Designs. At the moment all profits go to Amita and Yi, if they were to become a private limited company they would nail less profits themselves as they would have to pay dividends to all shareholders. resultAt the moment there are only two partners, Amita and Yi so they will be limited in the amount of money they can invest but they can make all the decisions themselves. If it were to become a ltd then other shareholders would be able to make decisions and Amita and Yi would lose both(prenominal) control of their business. There are also legal formalities involves in becoming a ltd which would take time and cost money.In order to secure the future of the business and expand I recommend that Orion Designs takes option 2 and stays as a partnership but invites other partners to invest in the business. This way they get the advantage of more capital in the business but do not have to spend a lot of time and money becoming an ltd.