What form of business organization—proprietorship, partnership, or corporation—do you recommend that Natalie use for her business? Discuss the benefits and weaknesses of each form and give the reasons for your choice.
CC1 Natalie Koebel spent much of her childhood learning the art of cookie-making from her grandmother. They passed many happy hours mastering every type of cookie imaginable and later creating
new recipes that were both healthy and delicious. Now at the start of her second year in college, Natalie
is investigating various possibilities for starting her own business as part of the requirements of the entrepreneurship program in which she is enrolled.
A long-time friend insists that Natalie has to include cookies in her business plan. After a series of
brainstorming sessions, Natalie settles on the idea of operating a cookie-making school. She will start
on a part-time basis and off er her services in people’s homes. Now that she has started thinking about
it, the possibilities seem endless. During the fall, she will concentrate on holiday cookies. She will off er
individual lessons and group sessions (which will probably be more entertainment than education for the
participants). Natalie also decides to include children in her target market.
The first difficult decision is coming up with the perfect name for her business. Natalie settles on
“Cookie Creations” and then moves on to more important issues.
a. What form of business organization—proprietorship, partnership, or corporation—do you recommend that Natalie use for her business? Discuss the benefits and weaknesses of each form and give
the reasons for your choice.
b. Will Natalie need accounting information? If yes, what information will she need and why? How
often will she need this information?
c. Identify specific asset, liability, and owner’s equity accounts that Cookie Creations will likely use to
record its business transactions.
d. Should Natalie open a separate bank account for the business? Why or why not?