Response to T Cook Thread


Hello Betty

I am writing this to you concerning you intention to open a Christian Coffee shop.

As your lawyer, I am writing to advice you on the type of business organization you can consider. Knowing the type of ownership you want will prepare you in advance on what to expect. Through this way you will mobilize resources required to help you start your business.

As you venture in your new business, I would like to encourage you to trust God for success.  The scripture says in Jeremiah 29: 11-13 (NIV)

“For I know the plans I have for you, “declares the Lord, ”plans to prosper you and not to harm you, plans to give you hope and a future. Then you will call on me and come and pray to me, and I will listen to you. You will seek me and find me when you seek me with all your heart.”

There are different forms of ownership that I want give some advice.

The first form of business ownership is sole proprietorship.  For this form of ownership, you will be the sole owner of the business. Betty, you will be the one in control of money you generate from your coffee shop.  You will enjoy all the profit.  You will also manage all activities of your business hence you will monitor growth of the business.  Another important aspect of this ownership is that it has few legal requirements (Dlabay, Burrow & Kleindl, 20, p. 108). There is no double taxation as it happens in a corporation. The cost of starting the business is not high for a sole proprietor. However, this form of business has some cons. You will have unlimited liability and your business and personal assets can be claimed by the debtor in case of large debts.  You will also have to suffer all the losses. This should not worry you as most businesses that are sole proprietorships have been successful for many business owners (Boone & Kurtz 2011, p. 146).

The second form of ownership is partnership. For this one, it is difficult to start. Creating partnership is hectic and partners have to sign an agreement that states the roles, expectations and how profits are shared.  This business ownership has more legal requirements than in sole proprietorship.  However it is easy to raise capital as partners will contribute capital required.  There is wide range of expertise therefore management will be easy (Pride et al, 2012, p. 114).

The third form of business ownership is the corporation. Betty, I would like to inform you that starting a corporation is quite expensive. It is time consuming and companies are taxed twice. The company and the owners are two different entities. The company will be taxed and the profits you will receive will also be taxed. However, a company has limited life and limited liability. It is easy to transfer ownership to another person. In case of bankruptcy, debtors cannot claim your personal assets (Bevans 2007, p. 5).

Having this in mind, Betty I would advise you to consider being a sole proprietor.  When you start the business, you file papers to protect your personal assets in case of loss in the business.  for a start, I advise to register your business as sole trader. When it is established, you can consider making partnership and then make the coffee shop a corporation.  After you experience growth, you can consider making your business a franchisor. This means that you can give rights to others to use your business name for a price. For example, in North Carolina, there are 13 active businesses using the name “Gathering Place”.

Finally, as you consider starting a business that is Christian based, do not forget about non Christians. They can add value to your business. Ensure that through your business, you can create good relationships and even make others know Christ. Let others witness that God is in control of your business.  I will leave you with a verse in Matthew 10: 32 that says “Whosoever therefore shall confess me before men, him will I confess also before my father which is in heaven.”