ipl-logo

The Legal Environment: Memo To Gloria Smithson's Case

680 Words3 Pages

You decide: Memo to Gloria Smithson DustinLee C. Foster The Legal Environment Professor: Melanie Morris DeVry University January 21, 2017 Memorandum TO: Gloria Smithson FROM: Dustin Foster DATE: January 21, 2017 RE: Advice on which business entity best suits Gloria Smithson objectives. Issue: Gloria, In reference to the best business entity to suit your objectives and reduce liability to protect your widget and family. I have outline the three best options below as well as my personal recommendation of which is the most optimal entity. Facts: Sole proprietorship: I feel like we have to discuss this option first so that you are aware of benefits as a sole proprietor. With this form of business, you are the business. …show more content…

There are obvious disadvantages here also, all funds come from, and are limited to your personal accounts. Likewise, the owner is responsible for all contracts and torts that employees make. Lastly the sole proprietor has unlimited personal liability for all debts and obligations (Cheeseman 459). General partnership: this entity requires two or more owners, in a general partnership you do not have to pay federal taxes also in a partnership owners can sign a right to participate in management or can decline too. Which let you make the decisions and your partner would just collet his share of the profits. Advantages: • Business obligation split between owners • Entitled to indemnification for personal expenses. • Right to accounting, legally award collaborates their share of assets in case of fallout or disagreement. The disadvantage here is the fiduciary commitment required and obligation to partners in profit and obligation. You lose direct decisions power in you company. Likewise, general partners have unlimited liability to debts. With the right partners this can be beneficial but, if not screened well and disagreement arise it could end up costing you your business (Cheeseman …show more content…

In addition, individual partners are not personally responsible for company debts or other obligations (Bayern, 2016). • The partnership itself is not responsible for paying taxes. The credits and deductions of the company are passed through to partners to file on their individual tax returns. Credits and deductions are divided by the percentage of individual interest each partner has in the company (Bayern, 2016). Disadvantages can come up with certain states and the tax requirement. Some states file you as a non-partnership, LLLP are not recognized in other states. You will have to make sure wherever you establish your business it is legally recognized (Florida Bar Journal, 2013). Recommendation My professional recommendation for you; with your situation is the last entity (LLLP). I suggest you enter an agreement with Roger and Nancy, since they are venture capitalists, and you wants to remain insulated from personal liability for debts of the business or liability in the event of injury caused by the widget. This entity will asset you best because as venture capitalist they have substantial funds to invest in the widget business and already have confidence in your design. The LLLP covers both partners liability thus protecting you and your

Show More
Related

Summary Of Kelly Santini Llp's Legal Considerations When Starting A Business

964 Words | 4 Pages

In addition, they are jointly and severally liable, meaning they are liable for the debts of the partnership. A limited partnership has at least one general partner, who has unlimited liability, and one limited partner, whose liability is limited to the amount of capital the limited partner invested in the business. The limited partner, also known as a silent partner, shares in profits on a proportionate basis, but they are unable to take part in the management of the business. Unlike a general partnership, a limited partnership requires a partnership

Read More

Ulta Beauty Case Study

841 Words | 4 Pages

- Many people want to start their own business for the freedom, satisfaction, and flexibility it offers them. Self-actualization: You get to build your vision instead of someone else's and It's personal: You get to invest your time and energy into something you love. Identify some businesses in your area that are owned by a single person. - The only one in my area is Dragonfly Thrift, owned by a single woman.

Read More

Shania Case Study

1256 Words | 6 Pages

The main benefit from a sole proprietorship is complete control of the business and all gains would go straight to Shania. In addition, she would not have to pay separate income tax, and she can deduct all losses. Conversely, there are some down sides. According to Cornell University Law School, “The owner, called a sole proprietor, does not pay separate income tax on the company, but reports all losses and profits on his/her individual tax return. Because the owner

Read More

How Do Antitrust And Competition Laws Play An Essential Role Of Competition In The Healthcare Industry

1639 Words | 7 Pages

For instance, they should not use their bargaining power to unfairly reduce reimbursement rates or limit the number of providers available to patients. Joint ventures refer to collaborations between two or more companies to undertake a specific business project or activity. Joint ventures can provide benefits such as increased efficiency and reduced costs, but they must also comply with antitrust laws to prevent anti-competitive behavior. In the healthcare context, joint ventures must not create a monopoly or unfairly limit

Read More

Pros And Cons Of Inequality In America

244 Words | 1 Pages

Pros: Higher purpose than just generating profits and shareholder value Integrating all stakeholders, conscious leadership, sustaining culture Cons: Implementation, new regulations,

Read More

Unit 1 Explain The Legal Requirements Of Different Types Of Business

689 Words | 3 Pages

Legally the business name of a Limited Partnership must not contain ‘limited liability partnership’, ‘LLP’, ‘public limited company’ or ‘plc’ it must also conform with any other government guidelines. This type of partnership is also liable for debts up to the amount that have been contributed, limited partners are also required to register for Self-Assessment with HMRC, register the business for VAT for sales at or above £85, 000 a

Read More

Business Proposal To Determine Tax Structure

670 Words | 3 Pages

The death of a partner will result in dissolve of partnership and limitation of transfer of partnership are the major disadvantage of partnership business

Read More

Nicor Inc. Essay

576 Words | 3 Pages

ensures that it utilizes natural resources and at the same time, ensuring that they conserve the environment. COMPARATIVE ADVANTAGES OF SOLE PROPRIETORSHIP, PARTNERSHIP AND CORPORATIONS. Formality Opening up a sole proprietorship and a partnership business is better compared to corporation. This is because corporations have to keep records of their finances and other business related documents and also, meetings have to be held at least once in a year for formulating strategies and goals.

Read More

Unit 3 Assignment 1 Start Up New Business

1196 Words | 5 Pages

I will discuss it further in section 11. - “Partnerships are more likely to succeed than sole

Read More

How Does Rosshandler Use External Sources Of Finance For A Business

893 Words | 4 Pages

It has several advantages and disadvantages. The advantages are allows you to pay new building, equipment and other assets used to improve and grow your business before you earn funds. The interests are clear, therefore, it is easier to plan for in budget. The bank has flexibility like small business. It has a complete picture of how to control over business.

Read More

What Are The Pros And Cons Of An LLC

198 Words | 1 Pages

By becoming a LLC, we can avoid the taxation that occurs when we first make our income and then after we distribute to our shareholders. The profits we receive will be larger because of this and we can help our shareholders profit. One of the main drawbacks to an LLC is that they are relatively

Read More

Middle Class Needs Financial Literacy Essay

620 Words | 3 Pages

An employee earns money by holding on to a job working for someone else. The self-employed makes money for himself/herself and is also financially insecure. A business owner is someone who generates money and has less control than the self-employed. They share and delegate the responsibilities and ownership with others. Business owners work smart not hard.

Read More

Taking A Look At Netflix

1036 Words | 5 Pages

However, the firm would bear the full risk and costs associated with setting up independent

Read More

Federal Requirements For Starting A Small Business

857 Words | 4 Pages

Many Americans prefer to start businesses rather than work under other business owners. By one being their own boss, they have more freedom to explore and express their creativity. As motivating as self-determination sounds, there are also drawbacks to being an entrepreneur. Anyone can overcome many challenges by being responsible, organized and prepared. As a matter of fact, when creating your business plan, it must be extremely organized.

Read More

Limited Partnership Research Paper

1062 Words | 5 Pages

This means that the limited partners have no management authority, and (unless they obligate themselves by a separate contract such as a guaranty) are not liable for the debts of the partnership. The limited partnership provides the limited partners a return on their investment (similar to a dividend), the nature and extent of which is usually defined in the partnership agreement. General Partners thus bear more economic risk than do limited partners, and in cases of financial loss, the GPs will be the ones which are personally liable. Limited partners are subject to the same alter-ego piercing theories as corporate shareholders. However, it is more difficult to pierce the limited partnership veil because limited partnerships do not have many formalities to maintain.

Read More

More about The Legal Environment: Memo To Gloria Smithson's Case

Open Document