In this assignment, you will research and apply the legal requirements for forming business organizations. You will also create a business, explain your selection for the type of organization and provide a brief overview of the business.
Discussion Question Part I
Select ONE of the scenarios below and explain the best solution. List possible alternatives and provide reasons why your solution is best. Include comments related to ethical issues that may arise.
Sherrie was one of the three partners of Kane’s Distribution, a partnership formed in Florida. Paramount Investment Corp. sued the partnership and obtained a judgment of $ 250,000 against it, but the partnership could not pay the judgment.
- What are Paramount’s options if the partnership cannot pay?
- Will Paramount win if they sue Sherrie for the entire debt?
- What are Sherrie’s options if Paramount sues her for the entire debt?
Buddy operates a handyman business performing various home repairs and renovations. Buddy is successful and has enough loyal customers to keep him busy, along with at least two workers. Buddy occasionally rents out some of his small equipment to other handymen and clients.
Buddy also purchases homes that need renovation and then rents or sells the properties, depending on the market. Most of the homes he owns are heavily mortgaged.
Buddy and his wife own a house, in which they have a reasonable amount of equity. Buddy’s wife handles the books for the business.
Which type of business organization is best for Buddy? Explain the advantages and disadvantages of your selection and why your answer is best.
Discussion Question Part II
Select any form of business organization and create a business that sells at least one tangible product. You will continue to build this business each week. In two to three paragraphs, provide the following information about your business.
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- Name of business
- Location of the principal office
- Type of organization (sole proprietorship, partnership, etc.) and why that form of organization was selected.
- Advantages and disadvantages of the form of organization
- Legal requirements for formation of the business in the state where the principal office is located.