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Business Entities, Laws, and Regulations
University of Phoenix
The paper will be evaluating the scenarios of a restaurant and bar with a wealthy 3rd party investor, an extermination company with a wealthy investor and owner, as well as a construction company that is hiring for a specific position in the company For each of the three scenarios, the business entity that represents the best choice for each one will be identified. Laws and regulations that each type of business must consider will also be identified. Risks that each of the businesses must protect themselves against will also be identified. For the construction company, ...view middle of the document...
As per the USA taxation policy, in a partnership firm, each partner is liable to pay tax separately. In this kind of business organization, each partner pays tax after distributing profit among them (The General Partnership, 2010).
In a partnership firm, partners should maintain unlimited liability. Liability of Lou and Jose is unlimited because they are responsible for each activity, but the liability of Miriam is limited because her role is to invest money only (Murray, n.d.). It is the responsibility of all the partners to behave in a lawful and ethical manner.
Laws and Regulations to Start Sports Bar as a Partnership Firm
It is essential for Lou and Jose to follow some regulations according to law to start this business firm, which is as follows:
➢ Both Lou and Jose should register for a Liquor license with the state government, so that they can serve alcohol to the customers. They should also hang this license in the bar to show the legal permission.
➢ Both the partners should also evaluate their legal responsibilities in a firm and all these laws should be in written form (The General Partnership, 2010).
➢ All the agreements between partners should be in written form and permitted by government, which describe the liability of all the partners and they cannot follow any illegal and unethical activities.
Risk regarding Business
Some risks are also associated with the opening of a restaurant and sports bar, which should be considered by the partners to protect themselves and their firm (The General Partnership, 2010). The biggest risk is the loss of money for Miriam. It is essential for all of them to make a written agreement to share equal profit and loss (Should You Have a Partner? 2010). Before entering into the partnership deal, all of them should judge that the partner would be liable in future and behave ethically and legally.
According to the scenario, Lou and Jose hire any candidate as per their suitability and requirement of the designation, but they should follow equal employment opportunity and ethical policies for their business
It can be said that the firm opened by Lou and Jose is a partnership firm, in which they both are liable for all the activities. They should enter a lawful agreement with Miriam to avoid the risk and follow the regulations made by state government.
The scenario explains that Frank is a wealthy investor and wants to open a chain of exterminating businesses all over the United States of America to use its money.
Business Entity, Control, Taxation and Liability
Per the given situation, Frank is planning to open a chain of exterminating businesses and this chain is operating by Frank only because he has sufficient capital to invest in this business chain. Thus, the best suitable business entity for this is the sole proprietorship (Becoming a sole trader: the basics, 2010).