Shekhar runs a bakery as sole prorietor over the years demand for his customized cakes and bakery product has increased . now, he intends to open a coffee shop, but is in a dilemma whether to hire a manager or enter into partnership . explain the available option and guide them in right direction .

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Solution

Dear Student

Shekhar is already running a bakery as sole prorietor over the years demand for his customized cakes and bakery product has increased, he has to devote his maximum time and energy to this bakery shop to keep it at heights.

Now if he is intending to open a coffee shop, he should enter into partnership, due to following reasons:-
1.Ease of formation and closure : A partnership firm can be formed easily by putting an agreement between the partners. There is no compulsion with respect to registration of the firm. Closure of the firm too is an easy task.
2.Balanced decision making : The partners can oversee different functions according to their areas of expertise. Because an individual is not forced to handle different activities, consequently decisions are likely to be more balanced.
3.More funds : In a partnership, the capital is contributed by a number of partners, so large amount of funds are available as compared to sole proprietorship.

Best available options to him is- to enter into Partnership.

Regards

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