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Business
Units
Akinda Dissanayake
-9CM

Business Studies Assignment #1

Due on: 24-05-24

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Scenario 1:
Family-Owned
Restaurant

Q1. The business ownership is a partnership, which is

two or more people putting money together and
working together. It was previously owned by great
grandparents, who passed it down to my
grandparents, who passed it down to my parents. Its
main owners are my mum and dad, because they can
handle responsibilities much better than any of the
young ones. Ownership is shared among all of us, with
each of us being assigned specific tasks based on our
specialization. For example, someone who can make
good food like my mum can be assigned the chef role,
my sister and I can be assigned the waiter/waitress
role, and so on.
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Q2. One of the risks of expanding the restaurant is

consistency; with the catering services, my parents will
find it hard to maintain the consistency in terms of
food quality, as they have to take care of both the
catering and the restaurant. A liability would be
general liability. Let’s say a customer gets sick after
eating the food. Then, they would blame our business,
and make us pay his/her medical bills, so we owe them
that money, making it a liability. Since we are working
as a partnership, our family also has the disadvantage
of having unlimited liability.

Q3.The business will be managed mainly by my mum

and dad. We will have a set menu, different every
week, and my mum will do the cooking. While they do
the cooking, my sister and I will take care of taking the
customers’ orders and serving the food, while my dad
will take care of the catering services.

Q4. Since we run a family business, we are going to

have to consider some tax implications, such as
income taxes, sales taxes, corporate tax, personal tax,
business tax and inheritance taxes. We can work with a
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tax-specialist to help us organize our taxes. Another

way we could deal with the tax issue by taking records
of our revenue, expenses and profit. We can then use a
portion of our profit to pay these taxes. By doing all of
this, we can make sure that our business runs smoothly
and successfully.

Q5. In my personal opinion, I think it would be best to

integrate the catering services into the existing
business unit. This is because of a number of factors.
One of them is that if we were to separate it, we would
have to have another place, for which we would have
to pay additional rent. Another factor is that since the
catering services are separated, we cannot call it a
family business because we can’t have all of us moving
from one place to another in a short amount of time.
Also, we would have to pay extra tax. We can protect
liabilities, minimize taxes and be efficient in operations
if we integrate our catering services into our existing
restaurant business structure.
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Scenario 2:
Freelance Graphic
Designer
Q1. The ownership structure of my freelance graphic
design business is currently a sole trader, as it is only
me working. If I were to hire some employees, then I
would have to share responsibilities among them. I
plan to manage additional designers by having a
structure, with some people on top, some on the
bottom, so that each and everyone has a
responsibility.

Q2. Some risks of hiring additional designers is that I

may not be able to trust them, and they might try to
steal. Also, if just one employee is absent from work,
the whole project will increase in difficulty as we are
short of one person. Some liabilities are wages, and I
have to pay them at least once every two weeks.
Another liability is space to work; since there are more
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people, we will need more space for many people to

work, so we have to rent another space. Since I have a
sole trader, I also have the disadvantage of having
unlimited liability.

Q3. I will be the one distributing tasks to the people.

The main group will be the design and selling group
itself; it will be divided into three subgroups, two
groups will work together to make the actual designs,
and the last group will take care of finances, and
financial decisions.

Q4. Taking into consideration that I am working as a

sole trader, I will have many taxes to take care of.
These include income tax, property tax, corporate tax,
sales tax and direct tax. I have my finance subgroup
that can take care of that matter, by taking records of
income, expenditure and profit, then using a bit of that
profit to pay off the taxes, or I could also get assistance
from a tax-professional. Using all of these methods can
ensure my business a safe and successful future.

Q5. As the owner of this business, I believe that it

would be better to form a partnership or a company to
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accommodate the growth of the design business. I say

this for a number of reasons. If I form a better business
structure, I do not need to worry as much as I used to
about taxes, wages and liabilities. I can also earn more
profit as I will be able to hire more employees, which
will let us do projects faster and receive more of them,
which in turn increases the profit rate. Management
will also be flexible, as there are more people and so it
is alright if one is absent, because we have a whole
team to cover it.

End of assignment