...Business Entities Kandace Chambers, Maria Santa Cruz, Misty Dunphy, Brandon S. Harris BUS/415 December 12, 2011 Lisa Johnson Business Entities Introduction Restaurant/Bar Jose and Lou want to open a restaurant and sports bar. The customers will be able to enjoy socializing, enjoy sporting events on the big screen televisions, and order food when they get hungry. Jose and Lou do not have the necessary capital for the sports bar. However, Miriam does have the capital and wants to be an investor in the business. Miriam does not have the time to be active in the business; she will provide the capital for part of the business as a silent partner. After extensive research Jose, Lou, and Miriam has decided that a general partnership is best. The general partnership would enable Miriam to be a limited partner with Jose and Lou managing the business. The criterion that must be met to start a general partnership is as follows: the business must be for profit, there are two or more owners, the owners must be carrying on a business, and they must be co-owners. The benefits of a general partnership is that one does not have to register with his or her state and pay the fee like a corporation or a limited liability company (LLC). The general partnership is a pass through business; the restaurant/bar will file an information return only (Cheeseman, 2010, p. 255, pp. 2). The profits and losses are “passed through” to the owner’s personal tax returns...
Words: 399 - Pages: 2
...Sole Proprietorship This is a business run by one individual for his or her own benefit. It is the simplest form of business organization. Proprietorships have no existence apart from the owners. The liabilities associated with the business are the personal liabilities of the owner, and the business terminates upon the proprietor's death. The proprietor undertakes the risks of the business to the extent of his/her assets, whether used in the business or personally owned. Single proprietors include professional people, service providers, and retailers who are "in business for themselves." Although a sole proprietorship is not a separate legal entity from its owner, it is a separate entity for accounting purposes. Financial activities of the business (e.g., receipt of fees) are maintained separately from the person's personal financial activities (e.g., house payment). Partnerships-General and Limited A general partnership is an agreement, expressed or implied, between two or more persons who join together to carry on a business venture for profit. Each partner contributes money, property, labor, or skill; each shares in the profits and losses of the business; and each has unlimited personal liability for the debts of the business. Limited partnerships limit the personal liability of individual partners for the debts of the business according to the amount they have invested. Partners must file a certificate of limited partnership with state authorities. Limited Liability...
Words: 849 - Pages: 4
...Business Entities, Laws, and Regulations Developing a new business entity is an undertaking that requires individuals to think critically about many aspects that pertain to forming and maintaining a business legally and ethically. A business can be defined as “An economic system in which goods and services are exchanged for one another or money, on the basis of their perceived worth” (BusinessDictionary, 2011, p. 1). In the initial contemplations, the owner(s) as well as investor(s), have to consider the different business types, laws, regulations, and liability issues that could affect the business endeavor before the concept becomes reality. To explain these responsibility about businesses the assignment is to consider two business ideas followed by a business scenario, which will be presented at the beginning of each subsection. In the evaluation of each business concept, there will be a discussion of which business entity would best represent the business in taking control, taxation, and liability issues that may arise during business operations. In the new start-up businesses and the given scenario the discussion will continue with identifying laws, regulations, and risks that must be considered to protect the business entity. Furthermore, in the business scenario, a discussion on employment laws and regulations will ensue on making an important business decision. As this assignment unfolds an individual will recognize that developing a new business is far more involved...
Words: 1494 - Pages: 6
...Entity Business Plan The business plan selected is the specialty high-end flooring contractor. The contractor will install all floor types (imported tile, granite, marble, hard wood, and carpeting) as part of new construction or remodeling. Business Plan Exhibits Define the goal of the business. The goals of the business is to create a for profit business. The business will provide the customer with high quality flooring products. The philosophy of the business will be to provide a customer-first orientation. The customer and not internal activities and constraints will be the priority. The business will strive for continuous improvement for all aspects of its operations. The business will respond rapidly to address all customer needs. The business will progress by using facts and analysis as the sole premise for strategies for improvements of operation and understanding its competition. The business will ensure that its employees are provided the latest training and tools to be successful in their careers and in the interest of the business. This business model is based loosely on the Total Quality Management (TQM) approach to business that is tailored specifically for the goal of the business (Stark 2008). What goods or services are provided? The contractor will provide premium flooring and installation for residential and commercial businesses. The business will be positioned to produce high volume work that is tailored for the needs of high end flooring. Who are...
Words: 1200 - Pages: 5
...Business Organization The first thing to understand when starting a business is how the structure of the company will be set up. There are several types of business entities and each entity has its own particular benefits and list of drawbacks. In this paper I will enumerate the following types of business structures: sole proprietorship, partnership, corporation and limited liability corporation, how they differ from each other, their advantages and disadvantages. Choosing the wrong structure may lead to paying more taxes and putting my personal properties at risk when something go wrong with my business. Being new in the business world, determining the limitations and liabilities of each business entities will guide me in choosing the right business structure that will best fit to my business field, my limitation, protection of my assets and the potential growth of my business direction. My husband and I were planning to start up a café shop. Joe is a coffee lover and I have a passion in baking. So we believe that putting together his love to coffee and my baking passion into a business is a great idea. There are several factors I should take in consideration in choosing the right entity for this business. First I wanted to know the extent of my personal liability, I am also concern how my earnings and profit will be taxed, how much work do it takes in setting the business into operation and how much capital I need to sustain the business. In order to answer these concerns...
Words: 1272 - Pages: 6
...I. Sole Proprietor: Advantages: No creation cost or time (nothing is Created) Quick start up Permits might be needed in certain business industry, as in food or liquor business. Autonomy Own the business out right. Set own hours of operations Can choose pace of growth Can quickly choose to have new areas of business Can operate under a DBA/ assumed name other than owners personal name a. Cannot have corp or Inc. in name Disadvantages: 1 owner/can not bring in partners If owner were to die, business cannot transfer. Raising capital for further business would be a problem a. Can take out a bank loan b. A loan from an individual, c. Or using personal credit cards to fund the newly formed business d. Venture capitalists for private placement of non-public security e. Venture capitalists will then exit in IPO (initial public offering) Taxes: A. Income is treated as an ordinary personal income for filing tax purposes b. In the U.S. Personal income tax usually has the highest taxation rate. 1. There could be a large tax burden depending on personal tax rate Unlimited Liability a. Personal and company assets could be exposed to creditors, obligations along with personal injury lawsuits. II. General Partnership Advantage: a. Same as sole proprietors b. Management responsibilities are divided up c. Quick formation Disadvantages: a. Same tax as sole proprietors b. Income is passed through each partner ...
Words: 311 - Pages: 2
...Business Entities, Laws, and Regulations Paper When an individual or group of individuals decided to open a business there are many choices that will need to be made about what type of business they will want to work toward. First an entity for the company will need to be chosen. This entity will help decide how each individual will be held responsible for the business as well as liability issues and taxation procedures. Control of the business will also be a factor when choosing a particular entity. We will be focusing on two different scenarios and need to decide what type of entity the company needs to choose. Liability as well as rules and regulations will need to be taken into account so that the business will not only profit but will be safe from many risks that can occur when operating a business. The last scenario will discuss what rules and laws a company must abide by when hiring individuals. We will take in to account that this is a new construction company that will be looking for a certain individual to hire for the new position. Restaurant/Bar Scenario In this scenario we have two individuals, Lou and Jose that want to open a sports bar complete with large TV’s to entice customers to come in a watch many sporting events. The bar would serve alcohol and would offer food to their customers. They however do not have much money so another individual Miriam has agreed to invest money into the company for a part of the ownership, but does not want to have...
Words: 1562 - Pages: 7
...Business Entities, Laws, and Regulations BUS-415 11/13/11 Lester Bovia Business Entities, Laws, and Regulations Scenario #1 Restaurant Bar: Lou and Jose plan to open a sports bar and restaurant where customers socialize and watch sporting events on large-screen TVs that hang around the bar. They do not have much money, but they have Miriam, a wealthy investor who does not have time to participate in the business, but wants to provide capital to start the business in return for a percentage of ownership. Three people, Lou, Jose, and Miriam want to go into business together. They plan to open a sports bar/restaurant. The facility will offer a place for people to socialize, eat, drink, and watch sports. Lou and Jose have the skills to open and run such an adventure, but have little capital. However, Miriam is wealthy and willing to fund the project for a percentage of ownership. In this scenario, the group must decide the best business entity taking into consideration control, taxation and liability issues. This business venture is small in nature but has high liability risk. People, alcohol, and sports mixed together can be volatile; therefore the business owners should consider a partnership that limits their own personal liability. A limited liability company combines the most favorable attributes of general partnerships, limited partnerships, and corporations (Cheeseman, 2010). The formation of an LLC requires the company to include LLC (in some form or fashion)...
Words: 1149 - Pages: 5
...Business Entities, Laws, and Regulations Business Entities, Laws, and Regulations Regardless of the type of business to be opened, an entrepreneur should have a sound business plan, patience, motivation, and time. It takes knowledge of current laws and understanding of regulations that protect new business owners and their counterparts alike. Some employment laws vary state-to-state and some are federally regulated; however, it is up to a new business owner to not only learn these laws but to familiarize themselves with them to ensure compliance. Restaurant/Bar “Lou and Jose plan to open a sports bar and restaurant but they do not have much money. Miriam is a wealthy investor who does not have time to work the business; however, she wants to provide funds for the start-up of the business. In return, Miriam wants a percentage of ownership” (University of Phoenix, 2010). Business Entity A limited liability partnership is the best choice of business entity for Lou, Jose, and Miriam. Jose and Lou will control and manage the business while Miriam is the investing partner and will act as a limited partner. According to the IRS, “a partnership is the relationship existing between two or more persons who join to carry on a trade or business. Each person contributes money, property, labor or skill, and expects to share in the profits and losses of the business” (IRS, 2012). Control. A written partnership agreement is not required by law; however, it is a way for partners to...
Words: 1866 - Pages: 8
...Business Entities Businesses are faced with many legal challenges in various stages: establishment, management, and dissolution. In two of following scenarios the legal aspects of establishing, maintaining and dissolving a partnership companies are identified. In the last scenario, the legal aspects of hiring a new employee are investigated. Restaurant/Bar Lou, Jose, and Miriam should create the business as a limited partnership. A limited partnership consists of one or more general partners and one or more limited partners. General partners manage the business and take personal liability for debts. Limited partners provide capital and are personally responsible for debts up to his or her investment in the company but are not involved in the management of the business. Lou and Jose who will be managing the business’s activities would be the general partners. Miriam who is providing the financial backing but will not be making daily business decisions would be the limited partner. According to the Revised Uniform Limited Partnership Act (RULPA), in order to begin their limited partnership, Lou, Jose and Miriam will need to create and sign a certificate of limited partnership (Cheeseman, 2010). In the state of Colorado, the group will need to create a name for the partnership that must contain either the word or abbreviation for limited partnership or company (State of Colorado, 2008). The document must also provide the address of the business, the type of business, an agent...
Words: 1627 - Pages: 7
...Business Entities Paper Arbra Jones Business Law BUS/415 Professor Dina C. Gledhill February 20, 2012 Business Entities This paper will evaluate three scenarios, restaurant and bar with wealthy third party investor, an extermination company with a wealthy owner and investor, and a construction company which is hiring for particular position. The business entity that represents the best choice for each business will be identified as well as the laws, regulations, taxation, and control each business must consider. The liability issues each business must protected from will also be discussed. The evaluation of the construction company will identify and discuss employment laws and regulations the company must abide by. Restaurant and Bar Scenario Based on information provided in the scenario, Lou and Jose want to open a sports bar and restaurant. Miriam, a wealthy investor, has agreed to invest in the venture because Lou and Jose do not have enough startup capital. In return for her investment Miriam will receive a percentage of the company’s profit as an owner. Business Entity, Control, Taxation, and Liability A partnership would be the best business entity for the sports bar because there are three owners that will participate in the business and receive a percentage of the business profits. Miriam will provide the investment capital and Lou and Jose will run the day-to-day operations. A partnership allows all parties to have control of the business and decisions...
Words: 1583 - Pages: 7
...Business Entity Matrix Blake M. Reimert LAW/531 Beverly Spencer October 1, 2012 Business Entity Matrix |BUSINESS |Formation |Control |Liability |Continuity |Taxation | |Entity | | | | | | |Partnership | A general partnership | Partners | Tort liability: | the usual rule is that| Partnership does not | | |is a business entity in | |Partnership is liable |the death or withdrawal|pay federal income | | |which two or more | |for tortuous act of a |of one of the members |taxes, partnership | | |co-owners engage in | |partner, employee, or |dissolves the |files information | | |business. The partners | |agent committed while |partnership, although |return, income losses | | |own the business assets | |the person is acting |an appropriate |reported on individual | | |together. Unless a | |within the ordinary |agreement in the |partners’ personal | | |partnership agreement | ...
Words: 1474 - Pages: 6
...Business Entities, Laws, and Regulations Business Entities, Laws, and Regulations Two start-up businesses in different industries are beginning and an established company with labor issues are the focus of this paper. For the two start-ups, a sports bar and a birth clinic, a case needs to be made for the type of business entity they should each use. The established company is a construction company whose business entity must be identified and employment law pertaining to the scenario will be discussed. For each business, identification of the best business entity for the given situation needs to be accomplished first. The decision of the type of business entity will take into consideration control, taxation, and liability issues. Review of the laws and regulations that each ownership group must consider and identification of risks that the businesses should protect against will be discussed. Review of the construction company’s business structure and how it affects control, taxation, and liability issues along with how employment law impacts the current scenario is focused on. In examining the sports bar identifying the ownership structure and control issues will determine of the proper business entity be used. Below is the information provided for this business: “Lou and Jose plan to open a sports bar and restaurant where customers socialize and watch sporting events on large-screen TVs that hang around the bar. They do not have much money, but they do have Miriam,...
Words: 1589 - Pages: 7
...Business Entities, Laws, and Regulations The purpose of the paper is to review the restaurant/bar and extermination businesses and discuss the entity that best suits the business. I will also review the construction scenario and discuss if Surebuild is in violations of any employment laws. An entrepreneur’s main goal is to manage a successful business and also to protect his or her investments. After making a decision to start up a business the next crucial step is to decide on what type of entity is best suited for my business and below are the various options available to choose from. Sole proprietorship The owner of the company has the absolute power, and the business is not a legal separate entity. He or she has the rights to profits earned from the business, unlimited liability for debt incurred, has minimal liability protection, and can easily sell or transfer his or her business without any additional approvals. General partnership/Limited liabilities partnership Occurs when two or more people decide to go into business together as co-owners for a profit. When entering into a partnership there are certain rights and duties included in the partnership agreement as well as by the law. General partners are also personally liable for debts/obligations associated with the business as well as have rights in how to carry out the business. General partners invest his or her capital, help manage the company, and are also personally liable for debt. Limited partners...
Words: 1588 - Pages: 7
...Business Entities Jessica Perez BUS 311 Business Law Instructor: Janet Fiorentino 12/1/2014 As the manager of Acme Fireworks, I need to gather information to help the owner determine whether or not he should continue to be a sole proprietorship or if he should switch to another business entity. I will help him do so by explaining each entity and how they relate to his business situation. I am the manager of Acme Fireworks, a fireworks retailer who sells fireworks, puts on ground display fireworks, and large aerial display fireworks. The company started in the owner’s garage two years ago and now has 15 employees that you manage. The company started as a sole proprietorship, and the owner has never changed the entity. The owner has informed me that the company has received inquiries from several large businesses wondering if the company could create several fireworks displays on a regular basis. The owner told the inquirers that the company could fill such display orders, and a price per display was agreed upon. It was discussed that most of the cost for a fireworks display is for skilled labor, insurance, and the actual service of setting off the fireworks. No other details were discussed. The owner is anticipating that new employees will need to be hired, but he is worried that if the large orders for fireworks displays do not continue, the company will not have the funds to pay the new employees. The owner is now considering changing the business entity, but he...
Words: 1327 - Pages: 6
