OTE2601
ASSIGNMENT 2
DUE : DUE 7 JUNE 2024
, ASSIGNMENT 02
QUESTION 1
Every entrepreneur has certain expectations and goals when choosing a business.
1.1 What is a close corporation in business? Give one examples.
A close corporation (CC) in business is a type of legal entity that is similar to a
partnership but has limited liability for its members. It is typically a small business
structure where the owners are involved in the day-to-day operations and
management. In a close corporation, the number of shareholders is limited, and the
shares are not publicly traded. One example of a close corporation could be a family-
owned restaurant where the family members are the shareholders and actively
participate in running the business.
1.2 You are a Grade 7 teacher leading a discussion on the different kinds of
franchising.
1.2.1 What are the issues to consider when discussing about capital
requirement for a franchise
Initial Investment
Franchisees typically need to make an initial investment to purchase the franchise
rights and set up the business. This may include franchise fees, equipment,
inventory, and leasehold improvements.
Ongoing Fees
Franchisees are often required to pay ongoing fees to the franchisor, such as
royalties and advertising fees. These ongoing expenses can impact the franchisee's
cash flow and profitability.
Financing Options
Franchisees may need to explore financing options to cover the initial investment
and ongoing expenses. This could involve obtaining loans from banks or financial
institutions, using personal savings, or seeking investment from partners or
investors.
ASSIGNMENT 2
DUE : DUE 7 JUNE 2024
, ASSIGNMENT 02
QUESTION 1
Every entrepreneur has certain expectations and goals when choosing a business.
1.1 What is a close corporation in business? Give one examples.
A close corporation (CC) in business is a type of legal entity that is similar to a
partnership but has limited liability for its members. It is typically a small business
structure where the owners are involved in the day-to-day operations and
management. In a close corporation, the number of shareholders is limited, and the
shares are not publicly traded. One example of a close corporation could be a family-
owned restaurant where the family members are the shareholders and actively
participate in running the business.
1.2 You are a Grade 7 teacher leading a discussion on the different kinds of
franchising.
1.2.1 What are the issues to consider when discussing about capital
requirement for a franchise
Initial Investment
Franchisees typically need to make an initial investment to purchase the franchise
rights and set up the business. This may include franchise fees, equipment,
inventory, and leasehold improvements.
Ongoing Fees
Franchisees are often required to pay ongoing fees to the franchisor, such as
royalties and advertising fees. These ongoing expenses can impact the franchisee's
cash flow and profitability.
Financing Options
Franchisees may need to explore financing options to cover the initial investment
and ongoing expenses. This could involve obtaining loans from banks or financial
institutions, using personal savings, or seeking investment from partners or
investors.
