Mcgee Cake Company Case Study

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Recommended: Describe the type of ownership

The McGee Cake Company
Justin R. Deschaine
Robin Shah
BUS 350 Principles of Finance
4 July 2015

The McGee Cake Company

The McGee Cake Company is a company that was created and founded as a hobby by its founders Doc and Lyn McGee. At first both of the founders continued to work their regular jobs but performed the functions of their cake company as a side project. Initially the cake company had only two employees which handled the day to day operations such as baking, marketing and distribution. “Doc did all the baking while Lyn handled the marketing and distribution.” (Ross, Westerfield & Jordan, 2013 p.19) The company was created a premium quality product with their aggressive marketing stance creating …show more content…

5). Even though there are two owners of the McGee Cake Company it is still similar to a sole proprietorship. A LLC will allow the same aspect of ownership and also the protection that a corporation has. The protection that a LLC will offer is legal protection for any legal actions brought against the organization rather than the legal action being placed solely on the owners. Also a LLC does not have to disclose financial records to the United States Securities and Exchange Commission …show more content…

With a corporation the McGee Cake Company would need to disclosure much more information that may not necessarily be readily available such as all of the previous financial documentation. Also the corporation would allow the owners to have many more rights and privileges the owners would have much more paperwork and a heavy obligation to fulfill especially since investors are liable for the company’s current or future debt. Although a corporation can drastically increase the size of the cake company a title of corporation brings a much heavier retrospect of experience and recognition across the world where as a LLC will not require as much experience or

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