Assume that you are a business major working as a summer intern for Dolly Madison, the owner of Jolly Dolly Cupcakes. Dolly started out making cupcakes for children's birthday parties just by herself. The parents of the children suggested that Dolly start up a small bakery because their children were always asking when they could have Ms. Madison's cupcakes again long after their birthdays. Dolly thought about this and decided to start up a small business as a sole proprietor. She obtained a business license and approval by the county's department of health to bake cupcakes. In a few months after word got around town, the parents were eager to take their children to the cupcake shop. Surprisingly, the parents enjoyed the cupcakes as much as the children and it wasn't long before she had more orders than she could handle by herself. She brought you on as an intern because you had taken some accounting and finance courses in your major. As you start the beginning of your internship, you have an introductory meeting with Dolly. During your meeting, Dolly indicates that she can really use your help. She knows her business is expanding but she doesn’t know what to do. Although she originally set up her business as a sole proprietorship, she is wondering if she should change her organizational status to accommodate the business’s increases in growth.

Write a memo to Dolly describing the different forms of organization as well as the advantages and disadvantages of each.