Question

Jamal and Brian want to open a business called “HOT GUYS & HOT CHICS MOBILE CAR DEATAILING”. The idea is that young good looking men and women ages 18-25 will come to your residence and detail your car, SUV or pick-up truck. They believe that young attractive employees dressed in tight workout shorts (men) and bikini bathing suits will attract tons of business. They want to open as many of these businesses as they can in warm-weather cities in Florida, Texas, Louisiana, Arizona, California and Nevada.

a) What type of entity is best for Jamal and Brian when forming this business and why?

b) What type of business form would they benefit most from for this concept and why?

c) What would be their biggest challenge with multiple locations in several states and why?

Answer 1

1. it should be a separate entity when forming this business, because if it will be associated with a personal account, in the future there may be a problem created while dealing with personal and business at one account.

b) in this business they should apply partnership, with proper legal documentation. this will be help full for both the partner to derive their portion of profit accumulation and welfare maximization.

c) in case of multiple location , it is difficut to keep eye in every location for their pofit point of view. so managing multiple location may requir a business cooporation rather than partnership.