Advising on Legal Structure
You are working for Goodwin & Benson Inc, a Chartered Management Consultancy Firm
based in Curzon Street, London. You have been asked your expertise on legal structures of
several clients and you must make a recommendation based on your 15 years of expertise
and experience in this sector. Using all your knowledge, notes and information from your
own personal library, please make a recommendation which is logical, fully justified and in
depth. Each recommendation must be presented to the board.
1 Chip shop
The local Chip Shop ‘Oh My Cod’ based on a side street, Oak Park Road within Stourbridge has
been established for over 4 years. This business is owned by Alf Tucker, a man passionate about
food, football and his family. Alf enjoys his work and is pleased to set up his own business after
30 years working in a shirt factory in the Black County. He was made redundant 5 years ago and
this business venture has ‘been the making of him’ according to his wide Sally. Alf is looking for a
partner to help refurbish his shop but doesn’t have the funds himself to carry out this work, nor
any personal savings (he spend all his redundancy payment on opening the new shop 4 years
ago). It may be worth noting that his brother, Adam, owns a DIY shop and substantial personal
savings. Alf has some experience of DIY but is not sure of this type of work is within his realm of
expertise. Alf has one O-Level in woodwork and has limited reading and writing skills. His brother
however, has a degree in Business and Management from the University of Durham. Alf and his
brother have a close relationship but both are unsure if working together may harm their
relationship in the long term.
He eagerly awaits your report and recommendation.
2 Engineering
A SME (small to medium sized enterprise) called Du Point based in Campsie, Londonderry,
Northern Ireland has recently expanded by recruiting a further 500 staff to its chemical
engineering team. Du Pont are leading producers of nylon and export heavily to China, the
States and Mexico. The Board of Directors feels that the 5 year plan for the company is crucial,
especially now. He is keen to further expand and thinks now is the right time. The company
currently benefit from limited liability and have an annual turnover of £3.75m. Current
shareholders (family and friends) enjoy healthy returns on their investment each year and do
not want the company to grow too large. They feel it may lead to certain diseconomies of scale.
However, the Board’s main objective this year is just that, growth. There are now some conflicts
internally and the Board require some advice.
The board eagerly awaits your report and recommendation.
Advising on Legal Structure
3 Hairdresser
Your client is a hairdresser and has been working from his salon in Silver Street, Cambridge for
the past 15 years. He (Mr Denman) is now thinking of starting up his own business but it not
quite sure of the process, nor his options available. He may have the option of opening as a Sole
Trader a Partnership or indeed a franchise. Mr Denman has trained with VO5 in salons in New
York for many years with his partner Anton. Anton has since changed his career to fashion
design and works in NYC, Paris and London but is willing to help Mr Denman financially if he
needs with any new business venture he decides. Tony and Guy have been in touch with Mr
Denman recently and he is favouring this option due to its prestige. There is no Tony and Guy
salon in the centre of Cambridge today. It may be worth noting; Mr Denman has no savings, a
poor credit history but is one of the most sought after hair dressers in the whole of
Cambridgeshire.
He eagerly awaits your report and recommendation.
4 Solicitors
Don McClay has been working as a legal aid and part time solicitor for Hilary Carmichael
Solicitors in Edinburgh for the past 3 years since graduating from law school with a LLP and a LPC
from Nottingham University. Don is highly ambitious and wants to eventually own and manage
his own legal practice but isn’t quite sure how to go about this process. Don has a good
knowledge of legal structures of businesses from his degree but it fearful something may go
wrong if he ‘bites off more than he can chew’. He stays in touch with all of his LPC class mates
via Facebook, a few of which have suggested they all start up a practice together. Don isn’t sure
of he trusts his friends enough to risk his £15,000 savings as he is aware of something about
‘being liable’ for any initial investment he makes but he feels he isn’t going to develop any
further in his current role. Don isn’t a great risk taker and doesn’t rate himself as a great
business man, but a great lawyer. He is very intelligent and has a great skills working within the
legal profession and willing to work hard.
He eagerly awaits your report and recommendation.