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Reacting to a Process Gone Wrong

In:

Submitted By brooklyn41
Words 1647
Pages 7
University of Phoenix

BUS/415

Steven Lee

August 08, 2010

Restaurant/Bar Scenario

Business Entity, Control, Taxation and Liability

As per the scenario, Lou and Jose plan to open a sports bar and restaurant, the best business entity choice for this restaurant and sports bar is the partnership firm because Lou, Jose and Miriam are the three persons who want to start the business in return for a percentage of ownership. Lou and Jose will take care of business operations and Miriam will invest money. Miriam will allow to Lou and Jose to keep control on business activities by sharing profit with them, so it would be considered as the partnership firm (The General Partnership, 2010).

In a partnership firm the all the business decisions are taken by the conformance of all the partners. In this scenario, Lou and Jose are the main controllers and their partnership is general partnership but Miriam would not have any control because he is giving money in to earn profits only (Liability for partnership debts, 2010). According to the taxation policy of USA, in a partnership firm the tax will not incur on profit before distributing to the partners. In partnership business entity, the tax would be paid by the individual partners after distributing the profit among them (The General Partnership, 2010).

According to the common law, in this partnership business entity, the liability of Lou and Jose is unlimited for the business organization because they will manage all the activities and plans of the restaurant but the liability of Miriam is limited because he is investing only capital to start the business. All the partners in this entity are protected from the unlawful and wrong acts (Murray, n.d.).

Laws and Regulations to Start a Restaurant or Sports Bar

In order to start this restaurant or sports

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