For three years, John has run a small coffee shop as a sole proprietor. He is not a particularly skilled cook - he serves coffees and teas that he...
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For three years, John has run a small coffee shop as a sole proprietor.

He is not a particularly skilled cook - he serves coffees and teas that he "makes" on site, as well as a selection of snacks and pastries that he purchases from a local bakery and food distributor. But he is ambitious, and John would like to expand beyond such a simple business. He knows Ringo - a skilled chef who is unhappy working at a "box" family restaurant - would like to have control over his own kitchen and have a free hand in creating an interesting menu featuring dishes that he would cook. John would like to join forces with Ringo to form a bistro-style restaurant venture (assume John would close his coffee shop and Ringo would leave his current chef job). John also has a business acquaintance named Paul; Paul owns desirable retail space on the main shopping street of their city that could be converted into a restaurant.
Assume you are advising John. Given the background information, which of the following business structures would you advise him (them) to use in order to operate the new bistro?
a) A sole proprietorship owned by John (Ringo being an employee)
b) A partnership (John and Ringo OR John, Ringo, and Paul)
c) A joint venture (among John, Ringo, and Paul)
d) A corporation (owned by John, Ringo, and/or Paul)
Explain your answer.

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