HC1010 Assignment Specifications Purpose: This assignment aims to reinforce and extend students’ knowledge and understanding of key topics in this course (HC1010) including: Overview of Accounting,...

For the bakery Rob can adopt any of the following forms of the organization -
1. Sole Proprietorship – If a business or the firm is owned by an individual and no partnership is formed as such then it is called the sole Proprietorship.
a. Advantages –
i. All profits belong to you.
ii. No need to divulge any information about the long term or the short term goals in any public domain
iii. More autonomy as far as the direction of the organization is concerned
b. Disadvantages-
i. Not limited liability and the owner has the entire risk of the taxes, financial liabilities , operational and financial risks
ii. Responsible for all the taxes
2. Partnership – When a business is owned by more than one person then it is called the partnership and all the responsibilities, right and duties as well as the percentage of the ownership is mentioned.
a. Advantages –
i. Limited liability to the partners. Only one general partner has the unlimited liability in the firm.
ii. Strategic directions by multiple stakeholders and hence, better decision making
b. Disadvantages-
i. Multiple opinions and hence, conflicts
ii. Taxes to the individuals as well the business
3. Corporation – Multiple stakeholders and shareholders own the business and hence, it will form a corporation.
a. Advantages-
i. Limited Liability
ii. More transparency in the business due to increased scrutiny of the shareholders
iii. Alignment of the short term as well as the long term objectives of the firm.
b. Disadvantages-
i. Need to divulge the information to the all the shareholders and higher scrutiny
ii. Managers and directors might have the conflict of interests and that might lead to corporate governance issues
Effect on the choice of the organization on availability on the finance of the business1-
Due to the limited liability structure of the businesses with the corporation structure, they can raise the money with the more efficiently as compared to the other structures as far as the equity infusion is considered.
Organization structure mostly talks about the ownership of the firm and the future cash flows generation. Based on the different structure, the firms will be able to generate the
However, the banks need to have a look at the stable and sustainable revenue income for the loans and that has a very little impact on the fundraising from the bank debt is considered.
Choices of the fund raising2 –
Traditionally any business can raise the fund using the two mediums – 1. Debt, 2. Equity
1. Debt –
a. As far as the debt is considered, the firms can raise the loans from the banks. However, in order to that excessive due diligence goes into play. In order to restrict the non-performing assets, the banks will look at the detailed plan of the financial projections, operational aspects, and the...