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Question - Leroy is considering starting a catering business. Leroy has three children (aged 3, 16 and 21) and is married to Melanie.
The proposed business will cater to high-end corporate clients and wealth individuals. In order to have the ability to cater for events for these clients, Leroy will need approximately $4 million of capital. Leroy intends to invest $2 million into the enterprise from his own funds and get the balance from third party sources. Leroy wants to have his wife and older children involved in the business as well. Leroy understands that catering activities do have a relatively high degree of liability risk.
Required -
(a) Advise Leroy as to which business structure would be suitable for him to operate his planned business.
(b) Would your answer differ if Leroy tells you that his friend, Linus, owned a commercial kitchen and that Linus wanted to invest that asset in the business in return for a 25 per cent interest in the business?
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