Discussion Question
Deidre McFadden came to the offices of Webber & Associates seeking help
in organizing her business, Fashion Angels, a toy-making enterprise focusing on
dolls with multiple outfits. She wants to run the business and has few
personal assets so is not worried about personal liability. Deidre’s aunt,
Penelope, is elderly, wealthy, and adores her only niece. Penelope is willing
to invest $500,000 to start the business, and Deidre has $10,000 to contribute
on her own. Deidre expects to do all the work without compensation as it will
take at least a year before Fashion Angels will make any profit. Penelope will
sign any agreement terms, with one condition. Penelope is insisting that Deidre
cannot leave the company, stating “I don’t want my money going to a stranger,
it’s for Deidre.”
Deidre is looking for your advice as to the type of entity that would
suit her best. “I don’t want my aunt to become the target for bill collectors
if I fail. And to be honest, I really don’t want her interfering in the
business because she can be quite aggressive.”
What advice would you give Deidre?
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