Question

Suppose you and some friends want to start a business to take tourists on wilderness backpacking expeditions. None of you has much extra money, so you plan to start small. However, if you are successful, you would like to expand into other types of outdoor tours and perhaps even open branches in other locations. What form of ownership should your new enterprise take, and why?

Answer 1

Considering me and my friends together made this backpacking expedition plan, we shall prefer a partnership enterprise because it would get us the freedom to frame our own business norms and work culture the way we wish to and at the same time, and we could also earn reasonably good profits among ourselves by putting considerable amount of efforts into the Organization. Besides, we would also love to have a certain level of autonomy and to design our venture in our own way, for which I believe, the partnership form of entity shall help us avail this advantage. Besides, since none of us have large amount of money in hand, each of us can contribute some to the extent possible to the business and gradually, we may be successful in availing a venture capitalist or some investor for our business, once we start growing up and expanding.

The legal formalities would also be limited in this form of Organization. Together we cannot go with the Sole proprietorship concern while settling up of a Joint-stock company would involve too much of formalities in the process. Hence partnership form is the most beneficial one.