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Question 1 (30 marks) Firas, founder of the GEREK Pushers Company, has developed several prototypes...

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Question 1 (30 marks) Firas, founder of the GEREK Pushers Company, has developed several prototypes of a pedal replacement for children's bicycles. The GEREK Pusher will replace existing bicycle pedals with an easy release stirrup to help smaller children hold their feet on the pedals. The GEREK Pusher will glow in the dark and will provide a musical sound as the bicycle is pedalled. Firas plans to purchase materials for making the product from others, assemble the products at the venture's facilities, and hire product sales representatives to sell the GEREK Pushers through local retail and discount stores that sell children bicycles. Firas will need to purchase plastic pedals and extensions, bolts, washers and nuts, reflective material, and a "micro-chip" to provide the "music" when the bicycle is pedalled. (a) How should Firas organize his new venture (I.e. proprietorship, limited liability, partnership)? In developing your answer consider such factors as amount of equity capital needed, business liability, and taxation of the venture. [20 marks) (b) Briefly describe the corporate form of business organization. What is meant by limited liability and ease to transfer ownership? (10 marks)

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