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CRITICAL THINKING PROBLEMWhich Type of Business Entity? Mary Amos has worked for a national chain of women’s clothing stores since graduating from college five years ago. She has held several positions with the company and is currently manager of several stores in her area. Over the past five years, Mary has observed that many women shop at one store for outfits and another for shoes, jewelry, and other accessories. Mary believes there is an unmet demand for a women’s store that sells complete outfits from head to toe. Mary has always dreamed of owning her own store and believes her idea of a “one stop shop” for women would be well received in the marketplace, especially with women executives who have limited time for shopping. Mary’s store would sell an array of women’s clothes, shoes, jewelry, and accessories for business, social, and leisure functions. Mary has discussed her idea with a number of people in the industry, including sales associates in other women’s clothing stores, and has conducted a marketing survey to test the viability of her plans. On the basis of analyses of her discussions and the data from the marketing survey, Mary believes that her plans are sound and that there is a high probability that she will be successful should she pursue her dream. A new upscale shopping mall is opening nearby and Mary has decided that now is the time to take the plunge into business for herself. Mary plans to open her business under the name of The Style Shop in the new mall. One of the things that Mary must decide in the process of transforming her idea to reality is the form of ownership for her new business. Should it be organized as a sole proprietorship, a partnership, or a corporation? What advice would you give Mary? What advantages and disadvantages are there to each choice? The following diagram will help you organize your thoughts.
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