Law
Harry the Handyman

Harry operates a local handyman business. Harry also does some routine maintenance work for a few commercial accounts. Harry is very successful and has enough business to keep him and several employees busy 6 days a week. Occasionally, a client rents repair tools from Harry. Clients sometime take their time paying for Harry’s services and, therefore, Harry is sometimes late paying his bills.

Harry’s capital is about $45,000, most of which consists of a couple of trucks and an assortment of repair tools and equipment. Harry’s wife handles the books.

Should Harry continue to operate his business as a sole proprietorship? In answering this question be sure to consider the advantages and disadvantages and discuss the applicable rules and why they do or do not apply in this case.
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