April 22, 2013
James Francisco PhD
Week 5: Legal Focus Paper
The legal department of Kudler Fine Foods is very informal. The legal counsel is Anne Shousha which is Kathy’s sister in law. Kathy handles all the legal issues personally with Anne. Through telephone calls and a couple of formal meetings all legal issues are handled for a fee of $100 per hour for only the formal meetings. The phone calls are free. So far, there have been only a few customer accidents that Anne has handled by advising Kathy to settle. There are a couple of the shelf forms that are used along with forms supplied by the other party to handle issues like leases and other deals. Kudler Fine Foods Legal Recommendations
The first recommended step is to form a corporation for Kudler Fine Foods. A corporation is recommended because in California a single member LLC disregards the owner as separate from the business. A Corporation would protect Kathy’s assets from any loss of the business. The corporation is the best way to protect Kathy; however, it is a more complicated process and will require Kathy to: • Create bylaws that describe how the corporation will operate. This includes stockholder meetings, director meetings, number of officers and their responsibilities. • Separate bank accounts and records
• Elect directors who elect officers.
Legal protection is an important part of running a successful business. For example, Horse meat was discovered in products that were sold in Sweden that were advertised as 100% beef. The company selling the meat blamed a supplier. They claimed they were defrauded by the supplier and were unaware of the meats content. The supplier blamed their sub supplier claiming that they were victims of the fraud. This is a case the makes it clear to distributors that they need to be careful who they buy merchandise from. Risk Controls
Distributors need to...