Business Entity Case Study Essay
Restaurant/ Bar Case
Lou, Jose and Miriam can go into business in the form of a corporation, or partnership, or LLC where Miriam provides monetary capital, while Lou and Jose provide manpower. An operating agreement or purchase-option agreement should be established under which Lou and Jose could each buy a predetermined portion of the business at a predetermined cost. If they choose to establish a corporation, they can elect to be taxed as an S corporation where they will not pay tax at the corporate level. The taxes will be paid at the personal level to avoid double taxation. One thing that should be guarded against is entering into …show more content…
Furthermore, he must ensure that he has adequate liability insurance to cover lawsuits should someone be injured by a chemical or by an employee in the home of a customer. The liability insurance would be necessary to cover the cost associated with medical bills or a lawsuit associated with an action taken on someone’s property. This insurance should be in place from day one and Frank must make sure that all employees are covered by such an insurance policy.
Frank will have some time before he needs to focus on additional employment laws. The early stage of the business will not require a lot of paper works and legal actions. As the company grows to more than 50, it will require additional investments of time and money to ensure the company is operating within its legal boundaries. At that point the company will need to have some sort of legal representation to ensure the actions taken by the company are done in an appropriate and legal manner (Mallor, 2003).
Construction Scenario Under the Civil Rights Act of 1964, a person cannot be discriminated against in employment based upon race, color, nationality,