Business Entities, Laws, and Regulations 1

Business entities, laws, and Regulations 1

Business entities, laws and regulations

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Date Business entities, laws, and Regulations 2

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 Business entities, laws, and Regulations 3

In order to start this restaurant or sports bar as a partnership firm, there are some law and legal regulations that should be considered by the partners before making the contracts of partnership and starting the business, which are as follow:

 It is necessary for the business owner to register for a liquor license with the local and state government to serve the alcohol and other drinks to the customers. It is necessary for the bar owner to hang the liquor license behind the bar to shows that the sports bar have the legal permission of government to serve alcohol and liquor drink (The General Partnership, 2010).

 It is essential to evaluate the various regulations in the partnership law to control the behavior of the partners and describe their liability and responsibility towards the society and government

(The General Partnership, 2010).

 The partnership agreement of the business concern and the legal responsibilities of the partners should be well written and permitted by the government, so that not a single partner will face any kind of wrong and illegal act (Adelson, 2010).

Risk regarding Business

There are some risks that should be evaluated before starting business in partnership. The main risk through which the business must protect itself is the risk of losing money and facing loss in the business. As the capital investor in the business is Miriam, he would have the biggest risk to face loss in business (The General Partnership, 2010). It is necessary for him to make a contract with Lou and Jose, in which they all would bear equal loss and profit. If the judgment of partner is not good and he would not follow the liability towards the business, the responsible person would tolerate all the loss (Should You Have a Partner? 2010).

Professional Practice Scenario Business entities, laws, and Regulations 4

As per the scenario, Akiva and Tara want to open a clinic to continue their professional practice, which they will open as under the legal regulations of general partnership. Under this partnership both the partner have the control over the business operation of this clinic. They should have to take decisions y discussing with each other (Hobday, 2010).

Under this type of partnership, both the partners have unlimited liability for the debts and other decisions of clinic. According to the income tax regulations, it is the responsibility of both partners to pay tax as a separate return. It is the responsibility of Akiva and Tara to report about her pro-rata share of the profit and loss that they gained in business in their personal tax return

(The General Partnership, 2010).

Under the unlimited liability, if the clinic would become fail and bankrupt, it is the liability of both the partners Akiva and Tara to pay the loan and bank will seized their personal assets. As Akiva and Tara have taken a loan to start the professional practice, both are responsible to pay the loan of bank (Liability for partnership debts, 2010).

Laws and Regulations to Start a Professional Practices

In order to start the professional practices as obstetricians, there are various laws and regulations that should be considers by both Akiva and Tara before starting a clinic. The main law is regarding the license and permission policy to open a clinic that should be taken by the medical council and state government before opening the clinic (Crausman, n.d.). The owner should have the experience in a particular field before starting their private clinic and it is necessary for the clinic to serve with ethical practices to the client. The professional expertise Business entities, laws, and Regulations 5 should have the ability to maintain suitable level of knowledge and skills (Salaman, 2002).

Another regulation in this concern is based on the confidentiality. The professional should remember that the private information of clients should not be leaked by anyone. In this concern the owner of the clinic has the liability (Crausman, n.d.).

Risk regarding Business

In order to start a professional clinic the main risk is associated with the experience of professionals in the childbirth field and take-care of mothers. The potential risk in this area is the malpractice of professional to earn gain more money and increase the profitability (Crausman, n.d.). Adverse treatment of patients would be harmful and risky for the success clinic and would harm the professional practice of Akiva and Tara. They should have the knowledge they will not do malpractices otherwise their license will be canceled by the medical board (Crausman, n.d.).

Thus, before starting a professional clinic both the partner should evaluate the various pros and cons of the partnership and what are the laws and regulations are associated with this business.

Construction Scenario

According to the scenario, the best suitable business entity for this construction company,

Surebuild Inc. is the corporation. It is a construction company which has a legal entity (Brown,

2003). It has its own rules and regulations, business policies and rights to do business in the industry that based on the corporate law.

Although, in a business corporation, the CEO and president of the organization has the control and authority to take any decision but decision regarding the different departments can be controlled by the different authorities, who are the supervisors and manager, general managers in Business entities, laws, and Regulations 6 the particular department (Dignam & Lowry, 2006). According to the given scenario, the responsibility of recruiting a jackhammer is controlled by Mei-Lin, who is the hiring manager in the company.

The taxation policy in a business corporation is quite complicated. In this the corporate tax of tax of the construction company should charge as the corporate tax rate, where as the dividends of the shareholders are taxed as their separate rate (Corporation Business Tax:

Overview, 2008). Corporations in USA follow the double taxation policy.

In the modern business organization, the most important feature of a company is its limited liability. If the business corporation become fail and bankrupt, shareholder lose their money and employee lose their jobs but they all are not liable to owe the debts of the company to the creditors (Brown, 2003).

Laws and Regulations to Start a Business Corporation

In order to start a business corporation in a particular country, firstly the business management should evaluate the way to enter in the market and take permission or license by the state government and evaluate a mode of entry such as partnership, merger, franchisee, subsidiary, etc.

The company should have a legal presence and requires documents to establish itself as a business entity. The rule, regulations and policies of the business firm should be based on the business and common law of the particular state (Salaman, 2002). The company should also follow the immigration law of employers and employees and federal and company law (Dignam.

& Lowry, 2006).

Risk regarding Business Business entities, laws, and Regulations 7

One of the most important business risks to start a business organization is related to its entity. The company should have sufficient resources to achieve the objective and maintain its profitability. The firm should have the right of intellectual property, to maintain its entity in the industry. With the construction business, the most important risk is the implementation of technologies. If the company does not have effective technologies to and instruments to construct any building, it would be risky for the success of the business (Dignam & Lowry, 2006).

Employment Law

According to this scenario, the company wants to recruit the person who has both the degree and experiences. In this scenario the firm should comply with the equal employment opportunity acct to make decision regarding the selection of an employee. According to the given criteria, the company should select Michelle (high school diploma holder but pregnant) and Nick (college graduate but epileptic). The company cannot discriminate these candidates because of the pregnancy and disease. It is the ethical responsibility of the firm to serve them health facilities after their selection to follow the employment and labor law and behave in an ethical manner (Bratton & Gold, 2001). Business entities, laws, and Regulations 8

References

Adelson, B.J. (2010). Should You Have a Partner? Retrieved from

http://www.myownbusiness.org/s4/

Bratton, J. & Gold, J. (2001). Human Resource Management: Theory and Practice (2nd Edition).

Routledge.

Brown, B. (2003). The History of the Corporation. Retrieved from

http://www.astonisher.com/archives/corporation/corporation_intro.html

Corporation Business Tax: Overview (2008, November 11). Retrieved from

http://www.state.nj.us/treasury/taxation/corp_over.shtml

Crausman, R.S. (n.d.). Board of Medical Licensure and Discipline. Retrieved

from http://www.health.ri.gov/hsr/bmld/

Dignam, A. & Lowry, J. (2006). Company Law. Oxford University Press.

Hobday, G. (2010). What Type of Business Organization is Best for You? Retrieved from

http://www.myownbusiness.org/s4/

Liability for partnership debts (2010). Retrieved from

http://www.rurallaw.org.au/handbook/xml/ch06s09s03.php

Murray, J. (n.d.). Limited Liability Partnership (LLP). Retrieved from

http://biztaxlaw.about.com/od/glossaryl/g/limliabpart.htm

Salaman, G. (2002). Decision Making for Business: A Reader (eds.). Published by SAGE.