Peter has run a successful small manufacturing business for the whole of his working life. He operates as a sole trader, but has now reached the age of 70 and wishes to retire. However he is of the opinion that none of his family (which consists of his three children and four grandchildren) is capable of taking on his business. In particular he has decided: (i) That he wants each of his children and grandchildren to inherit a share of the business but with the children each having twice as much of an interest as each of the grandchildren.. (ii) He is concerned that his heirs do not actually run the business. The manage- ment should be left in the hands of a long-term employee, Jack Jones, although since Jack is not a member of the family he does not wish him to own the business. (iii) He does not want the business to have to close just because one of the family wishes to withdraw from the business now or in the future. (iv) In the last few years, Peter has become concerned that the likelihood of being sued as an employer or for product liability is increasing. He is anxious that his family do not face the prospect of losing their private assets to meet such claims should he leave the business to them.

(v) He knows that the business will need further long-term capital if it is to maintain its position in the highly competitive market. He is confident that his family will be able to raise this since they own valuable property to act as security. Required Explain how the choice of business form could effect each of the issues raised above separately and then consider the overall position.