Question 2

(20%)

Mr Chen has been running a business making and selling $200,000 worth of toys each
year in a competitive and unpredictable market. He would like to achieve the following:
1. Get more capital since he has a couple of good inventors working for him and
several clever and confidential processes known only to the firm.
2. Settle his two sons into the business, now that his elder son has completed a
university course in marketing and his younger son a course in accountancy.
You are to advise Mr Chen on the type of business organizations (sole trader, partnership,
private or public company) that would be best for the business, giving the reasons for
your choice.