Robert and Smith actively involved in running a profitable partnership business that had an annual turnover of
Question:
Robert and Smith actively involved in running a profitable partnership business that had an annual turnover of $100 million. They inherited their business from their parents. They eventually would like their respective spouses and children to have share in the business, Robert and Smith want to maintain managerial control. They appreciate that their business needs additional money to grow and would be happy to sell 20 percent of their business for a significant cash injection from one or more investors. They confidently expect that with additional funding their business would quickly achieve a $200 million turnover and control 30 percent of the market.
Advise Robert and Smith whether they should continue to operate their business as partnership. Would another type of structure be more appropriate for them in the future?
Explain your reason fully (400-500 words).
Management Accounting
ISBN: 978-0132570848
6th Canadian edition
Authors: Charles T. Horngren, Gary L. Sundem, William O. Stratton, Phillip Beaulieu