November 14, 2011
Businesses in every industry have to deal with entities, laws, and regulations. Management teams have to take into account items such as consideration of control, taxation, and liability issues among others. The purpose of this paper is to discuss the restaurant/bar, professional practice, and construction scenarios. For each scenario the business entity that represents the best choice for each business, ownership structure, taxation, and liability issues for consideration. Identification of laws and regulations each business must consider in starting the business, and identification of risks against which each business must protect itself will also be examined for each scenario. Scenario 1
Cynthia and Mark 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 Sandra, 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 ownership (University of Phoenix, 2010). The business entity that represents the best choice for this business is a general partnership that two or more people can form. Taking control would consist with the three co-owners to make a partnership agreement in which each partner has equal rights in which to participate in the managing and controlling of the business. A majority rules over disagreements within the partnership situation and amendments to the agreement would require consent from all three owners. Each individual is responsible for his or her tax forms. Liability issues that should be taken into consideration include the unlimited personal liability for company loses, for a partner’s debts, for a partner’s transgressions. Laws and regulations the business must consider in starting the business deal with...