If Chick-Fill-A was a sole proprietorship it would be owned by and individual. The name would be a fictitious name registered with the government. The setup of the company would have been easy and would require little paperwork. As a sole proprietor, the business would have most likely not grown to the empire that it is currently. If it were a sole proprietorship, Chick-Fill-A would have experienced difficulty in raising capital. The initial funding would have come from the owner but raising additional capital for expansion would be difficult as the business cannot issue stocks or generate money in ways available to corporations.
One of the negative aspects that Chick-Fill-A would have is that the owner would be 100 percent responsible for all business obligations and debts. Any lawsuit against the company would extend to the owner (Crusto, 2009). The business would also lack continuity as the owner, and the business would be treated as the same, therefore upon his death, the business would be liquidated. All the decision-making power for Chick-Fill-A would rest on one individual a negative aspect of the business. Finally, as a sole proprietorship, the business would appear less professional (Marcum et al. 2009).
One of the positive aspects is that the firm would be able to respond quickly to decisions and day-to-day changes as there would be simplicity in making operations calls. Less government control would also be a positive aspect that the firm would enjoy as a sole proprietorship (Pride et al. 2010). The company would not be required to keep annual corporate records or incorporation records (Miller & Jentz, 2010). Also, the business would enjoy tax benefits by being taxed at personal income rates rather than corporate tax rates. Also, the owner does not have to do separate tax returns for the business, saving additional costs on tax filing and accounting. Finally, the owner would have control over all the money made at Chick-Fill-A and can mix his money with the business money without any problems.
References
Crusto, M. (2009) Unconscious Classism: Entity Equality for Sole Proprietors. Journal of Constitutional Law, 11(2): 215: 261.
Marcum, T., Blair, E. & Fred, F. (2009) The Disproportionate Costs of Forming LLCs VS Corporations: The Impact on small Firm Liability Protection. Journal of Small Business Strategy, 20(2): 23-43.
Miller, R. & Jentz, A. (2010) The Fundamentals of Business Law: Excerpted Cases. (2nd Ed.) Ohio: South-Western Cengage Learning.
Pride, W., Hughes, R. & Kapoor, J. (2010) Business. (10th Ed.) Ohio: South-Western Cengage Learning.
