Business Entities
Business Entities
Jessica Perez
BUS 311 Business Law
Instructor: Janet Fiorentino
12/1/2014
As the manager of Acme Fireworks, I need to gather information to help the owner determine whether or not he should continue to be a sole proprietorship or if he should switch to another business entity. I will help him do so by explaining each entity and how they relate to his business situation.
I am the manager of Acme Fireworks, a fireworks retailer who sells fireworks, puts on ground display fireworks, and large aerial display fireworks. The company started in the owner’s garage two years ago and now has 15 employees that you manage. The company started as a sole proprietorship, and the owner has never changed the entity. The owner has informed me that the company has received inquiries from several large businesses wondering if the company could create several fireworks displays on a regular basis. The owner told the inquirers that the company could fill such display orders, and a price per display was agreed upon. It was discussed that most of the cost for a fireworks display is for skilled labor, insurance, and the actual service of setting off the fireworks. No other details were discussed. The owner is anticipating that new employees will need to be hired, but he is worried that if the large orders for fireworks displays do not continue, the company will not have the funds to pay the new employees. The owner is now considering changing the business entity, but he does not know what entity to form or how to form it.
The owner has asked me to do the following:
Determine if the contracts with the businesses will be governed by common law or the Uniform Commercial Code (UCC), and explain why.
Analyze whether the owner formed a contract with the businesses, and apply the five essential elements of an enforceable contract.
Explain the potential personal liability to Acme Fireworks if a spectator is injured by a stray firework from a fireworks display.
Jessica Perez
BUS 311 Business Law
Instructor: Janet Fiorentino
12/1/2014
As the manager of Acme Fireworks, I need to gather information to help the owner determine whether or not he should continue to be a sole proprietorship or if he should switch to another business entity. I will help him do so by explaining each entity and how they relate to his business situation.
I am the manager of Acme Fireworks, a fireworks retailer who sells fireworks, puts on ground display fireworks, and large aerial display fireworks. The company started in the owner’s garage two years ago and now has 15 employees that you manage. The company started as a sole proprietorship, and the owner has never changed the entity. The owner has informed me that the company has received inquiries from several large businesses wondering if the company could create several fireworks displays on a regular basis. The owner told the inquirers that the company could fill such display orders, and a price per display was agreed upon. It was discussed that most of the cost for a fireworks display is for skilled labor, insurance, and the actual service of setting off the fireworks. No other details were discussed. The owner is anticipating that new employees will need to be hired, but he is worried that if the large orders for fireworks displays do not continue, the company will not have the funds to pay the new employees. The owner is now considering changing the business entity, but he does not know what entity to form or how to form it.
The owner has asked me to do the following:
Determine if the contracts with the businesses will be governed by common law or the Uniform Commercial Code (UCC), and explain why.
Analyze whether the owner formed a contract with the businesses, and apply the five essential elements of an enforceable contract.
Explain the potential personal liability to Acme Fireworks if a spectator is injured by a stray firework from a fireworks display.
References: Investor Words. (2014, 12 1). Retrieved from What is Corporation: http://www.investorwords.com/1140/corporation.html LLC Basics. (2014, 12 1). Retrieved from Nolo: http://www.nolo.com/legaencyclopedia/llc-basics-30163.html Rogers, Suzy. (2012). Essentials of Business Law. San Diego : Bridgepoint Education Inc. The Basics of Sole Propreitorships. (2014, 12 1). Retrieved from Entrepreneur: http://www.entrepreneur.com/article/77798 UCC Contracts vs Common Law Contracts. (2014, 12 1). Retrieved from The Presser Law Firm: http://www.assetprotectionattorneys.com/legal_business_counsel UCC vs Common Law. (2014, 12 1). Retrieved from Differences Between UCC and Common Law: http://www.differencebetween.net/miscellaneous/politics/