Application of Business Law in Partnership Formation Order Instructions: Please read below for information concerning assignment. Support responses with examples and use APA formatting in the paper.
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Please note that when you log into the website you must click launch class, and on the next screen click syllabus to view this week’s readings (week 1) and Academic Resources to access the school’s library.
The discussion assignment provides a forum for discussing relevant topics for this week based on the course competencies covered. To support your work, use the textbook, lectures and scholarly outside sources. As in all assignments, cite your sources in your work and provide references for the citations in APA format. Post the answers to both parts in one discussion post and do not attach documents.
The discussion assignment consists of two parts. Select one of the two questions for Part 1 and answer
Select TWO of the three case studies. Post your document to the W1: Assignment 3 Dropbox by Saturday, October 8, 2016. It is not necessary to copy the case study into the paper. Label the beginning of each case study with the number you selected (Case Study 1). Cite your sources in APA format on a separate page.
Application of Business Law in Partnership Formation Case Study 1
Blanche, Rose, and Dorothy formed a partnership, Retirement Living, to provide temporary housing for elderly people in the Miami area. One of the temporary residents set fire to the house, which resulted in the loss of the entire building and contents. One of the residents, Sophia, sued Retirement Living and obtained a judgment of $ 50,000 against it, but the partnership could not pay the judgment.
1. What are Sophia’s options if the Retirement Living partnership cannot pay the $50,000?
2. Will Sophia win if she tries to collect the entire debt from Blanche?
3. What are Blanche’s options if Sophia sues her for the entire debt?
Analyze the case studies, respond to each of the three questions, and support your responses with the applicable law and/or text materials.
Application of Business Law in Partnership Formation Case Study 2
McCoy, Spock, and Kirk are interested in going into business together. McCoy inherited a great deal of money from his friend, Scotty. Spock is an award-winning salesman with a marketing degree from State University and worked for five years as a senior sales manager in a large automobile manufacturing corporation. Kirk is an engineer who has developed a vehicle that will, according to him, “allow people to boldly go where no man has gone before.” Kirk, Spock, and McCoy believe a general partnership is the best form of business for the trio. Do you agree? Provide the advantages and disadvantages of their selection and then discuss two other options that might be more appropriate for the group. Conclude your paper by making a recommendation for the most appropriate choice. Support your answer with the applicable law and/or text material.
Application of Business Law in Partnership Formation Case Study 3
The Conners family operates a small transportation service for the elderly to take them to doctor’s appointments, grocery shopping, and other errands. The three (3) adult members of the Conners family, Dan, Roseanne, and Jackie, would like to become a corporation and obtain limited liability; however, taxation at the corporate level would be very costly for them. If possible, Roseanne would rather be taxed as a partnership. Dan is worried about the additional paperwork and meetings that incorporation would surely bring. Jackie does not want a large board of directors to be formed. Jackie fears that the board would somehow detract from the family goals and orientation the business has always enjoyed. In light of these concerns, is there a corporate form or other types of business organization that would better suit the Conners family? Explain the options, select the best option for the Conners and justify your selection with the applicable law and/or text materials.
Support responses with examples, the law, and/or text materials, and use APA formatting in the paper. Name your document SU_BUS2038_W1_A3_LastName_FirstInitial.doc. Submit your document to theW1 Assignment 3 Dropbox by Saturday, October 8, 2016.
Assignment 3 Grading Criteria Maximum Points
Answered one case study, analyzing the facts and provided well-reasoned answers that reflect an understanding of course material. Supported the response with appropriate cases, laws and/or other relevant examples. 20
Answered a second case study, analyzing the facts and provided well-reasoned answers that reflect an understanding of course material. Supported the response with appropriate cases, laws and/or other relevant examples. 20
Used correct spelling, grammar, punctuation and professional vocabulary. 5
Presented the paper in APA format and properly cited sources using APA. 5
Total: 50
Application of Business Law in Partnership Formation Sample Answer
Case study two
The suggestion to establish a partnership type of business formation consisting of McCoy, Speck, and Kirk is a good one. This is because the three can pull their resources and work together to achieve their business goals. Moreover, each of them has unique features which they will bring into the business. For instance, McCoy has money which they can use to fund their business activities; Spock has the necessary marketing skills which will allow their partners to sell their products. Lastly, Kirk brings them a unique product that they will be selling. Therefore, I feel that a partnership is an excellent idea for them.
Forming partnership by the three partners will be advantageous for them as it is simple to establish. Moreover, it will be less involving for them to change their legal structures in the future if the market in which they are operating changes (Twomey, 2017). Since each one of them comes from a unique professional background, a partnership will offer them a chance to carry out their personal business affairs in private. Lastly, they will be able to split their income, a fact that will significantly enhance their tax savings (Twomey, 2017). Since each one of them comes from a unique professional background, a partnership will offer. However, on the lower side, the three will be fully liable for the debts of the business, there will also be a risk of conflicts or disagreements between them and in case any one of them leaves, they will be forced to value the partnership’s assets, a practice that can be costly.
There are also other types of business formation apart from the partnership as explained by Twomey, (2017). Since each one of them comes from a unique professional background, a partnership will offer. This includes limited liability companies and cooperations. Limited liability companies are known to provide their owners with protection from business debts. This means that the debts of business are separate from an individual’s. Often, their profits flow through the company to the members who also have to decide if they would like to be taxed as a partnership or cooperation. Cooperation’s also offered limited liability protection to their members. However, they retain losses and profits at the cooperate level and are double taxed. Earning is in the form of dividends to shareholders.
Personally, I feel that a limited liability company will be more appropriate for McCoy, Speck, and Kirk. This is because they will be protected from their business’s debts and also will have a chance to bring in individuals with skills in the management information of employees. This is because both the three of them have limited knowledge regarding management.
Case study three.
There are three business formations that Dan, Roseanne, and Jackie can form. These are partnerships, limited liability Company, and cooperation. However, from their concerns, they are not comfortable with cooperation. This means that they are left with the option of forming a partnership or a limited liability company.
A partnership refers to a business formation that does not have any legal documents filed with the state. The running of the formation depends on an agreement between the forming parties or members. There is no legal formation and partners are responsible for the debts of the business (Twomey, 2017). Since each one of them comes from a unique professional background, a partnership will offer. On the other hand, a Limited liability company provides their owners with protection from company debts. This means that the debts of the business are separate from an individual. Often, their profits flow through the company to the members who also have to decide if they would like to be taxed as a partnership or cooperation.
Regarding the concerns of Dan, Roseanne, and Jackie, a limited liability company will be more suitable for them. This is because it gives an allowance for each one of them to address their concerns. For instance, Roseanne’s concerns about high taxation will be sorted by the fact that a limited liability company requires their owners to choose how they want to be taxed. In this case, they can file a partnership tax return and be taxed as a partnership. Dan ‘s concern of the paperwork will be limited by the fact that the business will not be in association with many regulatory authorities which requires constant updating. Lastly, Jackie’s dislike for many board members will be catered for by the fact that this type of formation (LLC) requires a minimum of two directors (Twomey, 2017).). Since each one of them comes from a unique professional background, a partnership will offer). Therefore, the three founding members will be the only directors unless they chose to add another person.
Application of Business Law in Partnership Formation References
Twomey, D. P. (2017). Anderson’s Business Law and the Legal Environment, Comprehensive Volume, 23rd Edition. [Vital Source Bookshelf Online]. Retrieved from https://digitalbookshelf.southuniversity.edu/#/books/9781305856516/
