Step 1: Compare and Contrast Chart
| Business Structure | Advantages | Disadvantages | Legal Implications |
| ------------------------ | -------------------- | --------------------| ------------------- |
| Sole Proprietorship | Easy to set up | Unlimited liability | Personal liability |
| | Complete control | Limited resources | No separate entity |
| | Simple taxation | Difficulty raising capital | |
| Partnership | Shared responsibility | Unlimited liability | Shared liability |
| | More resources | Potential for conflicts | No separate entity |
| | Simple taxation | Difficulty raising capital | |
| Limited Liability Company | Limited liability | Higher formation costs | Separate legal entity |
| (LLC) | Flexible management | Formalities required | Pass-through taxation |
| | Ability to raise capital | Potential for disputes | |
Step 2: Create a Venn diagram
See attached image for the Venn diagram.
Step 3: Compile a Report
After considering the advantages and disadvantages of each business structure, we have determined that a Limited Liability Company (LLC) would be the most appropriate ownership structure for our coffee shop.
Firstly, an LLC provides limited liability to its owners, which means that their personal assets are protected in case the business faces any legal issues or debts. This is important for us as we are just starting out and cannot afford to put our personal assets at risk.
Secondly, an LLC provides flexibility in management and ownership. The members of an LLC can choose to manage the business themselves or hire a manager to do so. Additionally, they can choose to have equal or unequal ownership shares in the business. This flexibility will allow us to make decisions and run the business in a way that suits our needs and goals.
Lastly, an LLC provides pass-through taxation, which means that the profits and losses of the business are reported on the personal tax returns of the owners. This avoids double taxation that can occur in other business structures, such as corporations. It also simplifies the tax filing process for us as owners.
In conclusion, the LLC structure provides the protection, flexibility, and simplicity that we need for our coffee shop. It allows us to focus on building and growing our business without worrying about the legal and financial risks associated with other structures.