David Johnson has decided to start a business and is a new client of your small public accounting practice called Trent Accounting Services. He has come to seek your advice about what form of business organisation/structure he should use, to set up his business given his circumstances.

David Johnson is a computer technician and was working for a computer repair company. He would now like to be his own boss, so he plans to start up a business in that field with the objective of later developing the business into one that also sells a variety of electronic items such as phones, tablets, notebooks, laptops, PlayStation equipment and games. The business name he would like to use if possible is Electronic Emporium. He estimates his turnover in the first year of operation will be around $60,000 and he does not anticipate employing any staff until business turnover increases.

David and his wife Jasmine live in a country town. They do not have any children as yet. He would like to include his wife in the business but she is currently employed full time. He is also concerned about putting the family home and a rental property at risk should the business fail. Both properties are held in David’s name.

Required Of the three main forms of business organisation (sole proprietorship, partnership, company) covered in chapter one, which form(s) would you recommend to David for his business and which would you not recommend, and why? In reaching a conclusion, your answer should include at least two advantages and two disadvantages for each of these business structures with reference to David’s particular circumstances.