Gabriel Ace Opon

BSHM32A

Instructions:

1. Read and analyze the case below and respond appropriately.

2. You may open your handout for reference.

3. Write your responses in the space provided.

Case: Martha Soriano, a Baguio City-based retailer and caterer, noted the severe shortage of
hotel accommodations in the city, especially during the annual Panagbenga Flower Festival. She
invited some foreign friends, Arthur Hewitt, an American retiree, and Rose Ann Grundt, a
German hotelier, to join and invest in her new business venture - the Mayflower Hotel. Based
on the business plan prepared, the total capitalization needed for the 50-room standard hotel is
Php20 million. Martha is only capable of raising half of the total investment needed. What
advice would you give Ms. Soriano as she forms a partnership with two (2) foreign partners?

Answer: According to the rules and regulations to govern the accreditation of Travel and Tour
Services, partnerships organized under Philippine Laws, at least 60% of the capital must be
owned and held by a Philippine national. However, as Martha is only able to provide P10 million
out of the needed Php20 million capital, the partnership would not be possible. Martha would
need at least Php12 million to be able to invest in a hotel with her foreign friends. To be able to
continue the partnership for Mayflower Hotel, Martha could invite another Philippine national
to invest P2 Million, in that way, two Philippine nationals would own 60% of the capital.