Economics Case Studies Market and Business Structures Case Study #2- Read the scenario and answer the questions below. You and your cousin have been baking wedding cakes for family members and friends for years. You've never had enough orders to justify baking cakes full time, but now you have dozens of people interested in your cakes. You are better at making cakes than your cousin, but she has more money and is willing to fund the business. You're going to meet tomorrow about how to move forward so you create a list of questions. You go to the U.S. Small Business Administration website and read the article "How Do | Choose a Business Structure?\". 1. What is the difference between a sole proprietorship and a partnership? 2. What are the advantages of a partnership? 3. You've heard stories about businesses being sued over their cakes. As a partnership, are you and your cousin protected in case the business is sued? Why? If your cousin wants to be a \"silent partner,\" how will that affect you? You're not sure how much money your cousin can put towards the business. Other than bringing in more partners, what else can you do to get more funding? Instead of being a partnership, you're thinking about creating a WED If you form a C-Corp, is it better for tax purposes to pay yourselves a salary or pay yourselves in dividends? Why? If you form a C-Corp, why would it be better to leave extra prot in the business instead of paying yourselves the money? What are some of the benets of an S-corp? In general, would it be easier or harder to raise money for your business if you are a corporation rather than a partnership? Why? 10. Do you think your cake business should be a partnership or a corporation