Partnership

Introduction A business also called a company, enterprise or firm is a legally recognized organization, designed to provide goods and services to consumers. According to the purpose of the business, ownership of the business and nature of economic contribution of the business; the business can fall into one of the three standard sectors. There are; private sector, public sector and nonprofit sector. The part of the economy concerned with providing basic government services is called public sector.

In most countries the public sector includes such services as the military, public transit, primary education and healthcare. Their aim is to give service to the people and less emphasis is made on profit making. Public cooperation is the widely known type of public sector business entity. The non-profit sector is derived with organizations that do not distribute their surplus funds to owners or shareholders, but instead use them to help pursue their goals. Examples include charitable organizations, trade unions, and public arts organizations.

In private sector, businesses are financed and controlled by individuals or private institutions, such as companies, stockholders, or investment groups. These businesses run for private profit and they are not controlled by the state or the government. There are many types of business entities defined in the private sector and authorized by the legal systems of various countries. These legal forms of business include; • Sole Proprietorship • Partnership (General Partnership, Limited Partnership and Joint Venture) • Corporation (C Corporation and S Corporation) • Limited Liability Company (Private and Public)

These legal forms have been derived according to their Source of the capital, Value of capital investment, Nature of ownership, Number of owners, Nature of liability and many other factors. Each legal form has its own advantages as well as disadvantages. When making a decision about the type of business to form, there are several criteria you need to evaluate based on advantages and disadvantages of above mentioned legal forms. The most important fact is cost of formation of the business and cost of ongoing administration. This includes cost of record-keeping and paperwork, as well as the costs associated with administrative requirements.

Legal liability is the next thing to be considered and it defines to what extent the owner need to be insulated from legal liability. Based on the individual situation and goals of the business owner, he has to consider what the available tax implications are because it is also an important factor. Finally the owner has to think about the future needs and whether the legal forms support flexibility feature. Sri Lanka Company Act, No. 7 of 2007 and Company Act, No. 17 of 1982 have defined Sri Lanka legal forms of organizations, which can be the choices for Sri Lankan business community when forming a new business.

Legal Forms of business in Sri Lanka include; • Sole Proprietorship • Limited Liability Company (Private and Public) • General Partnership Sole Proprietorship A sole proprietorship also known as a sole trader is a type of business entity which is owned and run by one individual and where there is no legal distinction between the owner and the business. Sole proprietorships are forms of business ownership that mingle the owner’s rights, liabilities and responsibilities with the business’ rights, liabilities and responsibilities.

Regardless of the state of the business, the procedures we need to follow to form a sole proprietorship are fairly simple, and do not even require an attorney, accountant, or business consultant. There are no legal requirements for establishing a sole proprietorship, other than obtaining the necessary local business license and permit. As the sole proprietor, owner has the full control and responsibility for the business and its operation and he makes all the decisions. With this type of business entity, owner has complete freedom over operating the business, because he is responsible for all transactions and activities occur in the business.

All assets of the business are owned by the owner and all profits and all losses accrue to him. He is personally responsible for all debts of the business and must pay them from his personal resources. This means that the owner has unlimited personal liability for the business. Also, owner is less burdened by government restrictions and control, and he has less to do in terms of reporting and taxes. The main advantage of a sole proprietorship is that they are easy to start up and to close. The reason is, they are less expensive and also subject to fewer regulations compared to other types of businesses.

Since the owner has full autonomy with regard to business decisions, sole proprietorship businesses are easy and inexpensive to discontinue. The second advantage is that the owner can take all the profits of the business and there is no profit sharing. This may be the most significant motivation for most businesses to become sole proprietorship type. At the same time, all losses accrue to the owner and he does not have the tension regarding conflicts among the partners as there are no partners.

In sole proprietorship business type, the owner of the organization pays self employment taxes on the profits made. It makes tax filing much simpler and hence this can be considered as another advantage for sole proprietorship business type. Since this is not a corporation; it does not pay corporate taxes. The remarkable disadvantage of the sole proprietorship is that the sole trader will likely have a hard time with raising capital since he has to make up for all the business’s funds. He may have to use his own money or personal loan for the business.

The next disadvantage is; the owner of the business has unlimited liability as he is responsible for the business’s debts. As the business grows, the risks accompanying the business also tend to grow, and if the business is sued, owner and his personal assets are at risk. Sole proprietorship business type is very prominent in Sri Lanka, may be because form of the business is very straightforward. As a third world country with low rate of individual income, starting up a business with low capital is a very convenient factor for any Sri Lankan business person who is thinking of having an own business.

There several home based business running in Sri Lanka such as; groceries, stationary shops, pharmacies, fashion stores and they can be categorized as sole proprietorship business, because they are owned by single person. Freelance writers, copy editors, photographers and craftspeople also have chosen to run their businesses as a sole proprietorship. Sri Lankan government has identified the importance of sole proprietorship businesses, in terms of their contribution to the country’s development.

So the government is encouraging this business community, to develop their businesses, by providing necessary financial aids, resources, equipment and guidance. Since Sri Lana is based on an agricultural economy, we can encourage more farmers to form their own sole proprietorship businesses to sell their goods, and this will reduce the terrible effects occurring from the intermediate business people. If farmers can sell their goods directly to consumers, they may be able to get full profit and it will encourage them to develop their business. This will ultimately lead to a high development in Sri Lanka’s economy as well as society.

Limited liability Companies (LLC) A Limited Liability Company (LLC) is a type of business organization that combines some aspects of a corporation with those of a sole proprietorship or partnership. The primary characteristic a LLC shares with a corporation is limited liability; that is personal liability of company’s members for the business’s debts is limited. The primary characteristic LLC share with a partnership is the availability of pass-through income taxation; that is LLC is not taxed as a separate entity. Forming a LLC may not be as simple as a sole-proprietorship; however, the process is much less than a corporation.

There are two main actions: • Articles of Organization: Have to file articles of organization with the secretary of province and pay the required fees. Articles may be prepared by a lawyer. An LLC business entity may be file as a corporation, partnership or sole proprietorship in terms of tax return. • Operating Agreement: Have to develop an operating agreement which helps to define the company profit sharing, ownership, responsibilities, and ownership changes An LLC may have one or more owners, and may have different classes of owners.

If the LLC has a single member, it will be disregarded as separate from its owner, and will be treated as a sole proprietorship or a division of its owner, unless it elects to be taxable as a corporation. An LLC that is filed for taxation as a partnership can achieve both conduit tax treatment and limited liability protection under civil law and a LLC filed for taxation as a partnership does not have the ownership restrictions. An LLC is typically managed by its members, unless the members agree to have a manager handle the LLC’s business affairs. LLCs do not issue stock and are not required to hold annual meetings or keep written minutes.

Generally, members of an LLC that are taxed as a partnership may agree to share the profits and losses in any manner. Members of an LLC receive profits and losses in the same manner as shareholders of a corporation. In general, all the owners and members are shielded from individual liability for debts and obligations of the LLC. The main advantage of LLC is that owners of the LLC have the liability protection of a corporation because it exists as a separate entity much like a corporation. Also members do not hold personally liable for debts unless they have signed a personal guarantee, and this is a great relief for all the members.

LLC can select varying forms of distribution of profits, unlike a common partnership where the split is 50-50. Hence flexible profit distribution is another advantage of LLC. The LLC business structure requires no corporate minutes or resolutions and is easier to operate. This can be pointed out as the next advantage of LLC. All the LLC business losses, profits, and expenses flow through the company to the individual members. So, it avoids the double taxation of paying corporate tax and individual tax. Generally, this flow through taxation will be a tax advantage.

The most significant disadvantage of LLC is the limited life time of business. A LLC is dissolved when a member dies or undergoes bankruptcy whereas corporations can live forever. Business owners with plans to take their company public, or issuing employee shares in the future, may be not best served by choosing a LLC business structure, because going public is bit complicated with LLC. So this can be again a vital disadvantage of LLC structure. Running a sole-proprietorship or partnership will have less paperwork and complexity compared to LLC.

So this added complexity also can be pointed out as a disadvantage of LLC structure. There are two major types of companies operating with limited liability status in Sri Lanka. ? Private Limited Companies ? Public Limited Companies Private Limited Companies A Private Limited Company, theoretically also refer to a private company limited by guarantee, is a type of company incorporated under the laws of England in certain Commonwealth countries. Private limited companies are required to have the suffix “Limited” (often written “Ltd” or “Ltd. “) or “Incorporated” (“Inc. “) as part of their name.

It has shareholders, but its shares may not be offered to the general public. This means that shares are usually sold to family, friends and business contacts. The liability of the shareholders to creditors of the company is limited to the capital originally invested; that is to the nominal value of the shares and any premium paid in return for the issue of the shares by the company. A shareholder’s personal assets are thereby protected in the event of the company’s insolvency, but money invested in the company will be lost. Most companies, particularly small companies, are private limited companies.

One of the main advantages of Private Limited Company is, they are easy to set up because; the shares are sold among family, friends and business contacts. Limited liability is another advantage of a Private Limited Company. The shareholder’s liability is limited to the value of the shares held by them. If things go wrong for the business, personal assets of a shareholder cannot be used to pay off the debts. Since boards of directors are usually the main share holders, the ownership and the control are closely connected. Therefore decisions can be taken more quickly and this can be pointed out as another advantage.

A Private Limited Company has a separate legal existence. This means that properties will be owned by the company itself and all contracts would be signed on its behalf. The directors and secretary can only act as agents. Therefore the company is not dissolved on the resignation, bankruptcy or death of a director which is a vital advantage of Private Limited Company. The company can be dissolved only by winding up, liquidation or order of the Registrar of Companies or by the Court. When we think about advantages, tax benefits of Private Limited Company are also can be considered.

The directors of the company are required to pay income tax but the company pays corporation tax on company profits which is one rate of tax only and averages out at much less than if income tax were paid on the profits. Though Private Limited Company has many advantages, there are some disadvantages which often deter small- and medium-sized business owners from setting up private limited companies. Many Private Limited Companies are very profitable. Unfortunately, these profits can become diluted because they must be evenly distributed among all shareholders, and many Private Limited Companies have up to 50 shareholders.

So this becomes the major disadvantage of Private Limited Company. The next point that can be a vital disadvantage is shareholders in a Private Limited Company are not able to sell or transfer their shares to the general public. The 50 or so shareholders that comprise a Private Limited Company must keep their shares and cannot trade them on any stock exchange. A Private Limited Company can be quite complex to create, meaning that lawyers and accountants almost always need to be involved in the Private Limited Company from the start.

This can be costly and hence a disadvantage. The importance of Private Limited Companies in Sri Lankan economy over the last 15 years has been tremendous. The opening up of Sri Lankan economy has led to free inflow of investments along with modern cutting edge technology, which increased the importance of Private Limited Companies in Sri Lankan economy considerably. Previously, the Sri Lankan market was ruled by the government enterprises but the scene in Sri Lankan market changed as soon as the markets were opened for investments.

This saw the rise of the Sri Lankan private sector companies, which prioritized customer’s need and speedy service. Most of the pioneering businesses in today’s Sri Lankan business world are categorized as Private Limited Companies. Some of the best examples are Richard Pieris & Company PLC; (One of the largest and most successful diversified business conglomerate), Abans Group – Abans Private Limited; (Represent world famous brands of household items), Singer (Sri Lanka) PLC; (Household durable company), ODEL (PVT) LTD; (Sri Lanka’s foremost fashion gallery).

Private Limited Companies are often considered the Sri Lanka’s version of limited liability companies. This may be because; for many years, forming businesses with the family and friends has been a custom of Sri Lankans. There are many examples such as Perera and Sons (PVT) LTD; (One of Sri Lanka’s foremost baker and caterer), H. Don Carolis & Sons (PVT) LTD; (Manufacturers of fine hand crafted wooden furniture), Ebert Silva Touring Co. Ltd; (pioneering Company in the travel and tourism industry) . These are consider as successful family businesses and categorized under Private Limited Company type businesses.

To promote private sector domestic investments, the Sri Lanka government has recently brought the bank interest rates down from 20 percent to around 10 percent for borrowings. Public Limited Companies A public limited company (legally abbreviated to plc with or without full stops) is a type of limited liability Company incorporated under the laws of England in certain Commonwealth countries and it is permitted to offer its shares to the public. This means that Shares in a public limited company, can be traded on the Stock Exchange and can be bought by members of the general public.

The Capital needed to start a Public Limited Company could come from two different sources; part of the money comes from a loan from the bank, and the rest comes from shares sold to the public, via the stock market. The liability of the shareholders to creditors of the company is limited to the capital originally invested; that is to the nominal value of the shares and any premium paid in return for the issue of the shares by the company. A shareholder’s personal assets are thereby protected in the event of the company’s insolvency, but money invested in the company will be lost. The dividend is paid out using the profits from a PLC.

The profit of the public limited company is divided into percentages and is paid out to shareholders. There are many advantages of operating the business as a Public Limited Company, and of registering the company on the stock exchange. For example, equity capital obtained from an initial public offering is considered a permanent form of capital since there is no interest to be paid on the equity, and it is not repayable like debt. Funds generated by a public offering are, therefore, considered a relatively safe form of capital for a business and this can be pointed out as the main advantage of the Public Limited Company type.

Going public can also allow a company the freedom and flexibility to spend capital, as it needs to finance its growth and further development, providing a solid financial base on which to build. This will be a vital motivate point for anyone who think to start a new business as Public Limited Company. Many companies use stock and stock option plans as an incentive to attract and retain talented employees. It is increasingly common to recruit and compensate executives with a combination of salary and stock. Stock can be instrumental in attracting and keeping key personnel.

Public companies are more likely to receive the attention of major newspapers, magazines and periodicals. The proper use of press releases, interviews or news stories can increase investor awareness, shareholder value, and demand for the stock, sales and revenue. Once a company becomes public it has to disclose so much information to public on regular intervals. This includes share holding pattern, quarterly and annual financial statements, profiles of directors etc. So it can be pointed out as one of the disadvantage of Public Limited Company.

In a Public Limited Company decisions take time is too long and it also can be a disadvantage. This is because implementation of any key decision is subjected to the approval by the board of directors elected by share holders. Shareholders in public companies expect a steady stream of income from dividends, which might mean that the business has to concentrate on short term objectives of creating a profit and this may be a vital disadvantage because it might be better to work on longer term objectives, such as growth and investment. The most significant disadvantage Public Limited Company has is the threat of takeover.

This is because they are traded publicly and another company can buy up a large number of shares and they can then persuade other shareholders to join with them to vote in a new management team. The Sri Lankan stock market has become quite vibrant and booming, particularly as a result of the end of the war, and this was a vivid point for growth of Public Limited Companies. New companies made their public offerings and were oversubscribed during the first day itself. There is considerable demand for company shares in the market and we can see many giants companies have turned into Public Limited Companies.

These companies represent banking, finance, insurance, healthcare, telecommunication, food, beverage and so many other sectors. Most important examples are; Commercial Bank of Ceylon Ltd; (Adjudged as the best bank in Sri Lanka), Janashakthi Insurance; (3rd largest general insurance company in Sri Lanka), Sri Lanka Telecom Ltd; (The premier telecommunication service provider in Sri Lanka), Cargills (Ceylon) Ltd; (Sri lanka’s largest food network) and Nawaloka Hospitals Ltd; (Asia’s largest and most trusted healthcare hospital).

The end of the war has put Sri Lanka on the radar of global companies as a country with attractive investment proposition opportunities. As the issuances of shares by resident companies to foreign investors are permitted in terms of a general permission, many resident companies have issued their shares to foreign investors. They include; Lanka IOC; (75% of shares owned by Indian Oil Corporation) and Millenium IT; (Shares were bought by London Stock Exchange). General Partnerships

A General Partnership is the most simplistic type of legal structure designed for the situation in which two or more people are collaborating in some type of business activity. The entities involved in a partnership can be individuals, corporations, or trusts. General partnerships are usually started with good friends or family. Starting up a new business is a huge risk and gigantic leap of faith. People who open up general partnerships need to trust each other and work well together.

Even if the business does not need a lot of assets to start or operate, still it needs a lot of money to open up a business. General partnerships allow more than one individual to carry the financial burden. This is ideal and makes a business much easier to open. By default, the profits and losses generated by a General Partnership are shared equally among its partners. However, typically a partnership agreement is created to further define the rights, responsibilities, and duties of each partner, as well as the terms of perpetuity if one of the partners withdrawals from the partnership.

Financial responsibility is shared equally among the partners, with each partner jointly and severally liable for all business debts and obligations which means that the partners are jointly liable for any and all legal claims against any of the partners. The taxation of a General Partnership is calculated at the individual level. General partnerships can be less expensive to form with a limited start up cost and it has a shared financial commitment, which can be consider as main advantages of this business type.

Also it requires less paperwork and formalities which encourage people to form their businesses as general partnerships. General partnerships can thrive when each partner brings a specific strength to the business. If each partner takes on a defined role and there is general agreement on the business plan, goals, and visions from the outset, a partnership can be advantageous. Work can get done more quickly, and having several partners involved will increase the potential of acquiring resources and attracting backers. In the end, the success of such an endeavor depends largely on the personalities of the parties involved.

General partnerships offer members the advantages of shared risk and total control over the transactions of the business. One of the most significant benefits of a General Partnership is simplified tax filing, since no corporate forms or double taxation is required. As a pass-through tax entity, this form of business pays no direct tax instead its individual owners carry the tax burden However, the wide array of disadvantages of a General Partnership is what makes it arguably one of the worst organizational business structures available.

Because of the lack of corporate structure, a General Partnership does not establish any kind of separate business entity from the partners. This means that the partners are totally unprotected from any litigation against the business, and their personal assets can be seized at any time to cover the unmet obligations of the business. Even worse, each partner is liable for the actions of the others on behalf of the business. So if one of the partners was to execute an agreement without the knowledge of the others, each partner would become equally obligated to the terms of that agreement.

The same is true for credit obligations. If any of the partners secure credit on behalf of the business, each partner would become equally obligated to the terms of that debt. In addition, without a Partnership Agreement, there is no guarantee of perpetuity for a General Partnership if one of the partners dies, becomes disabled, or withdrawals from the business. For these and other reasons, general partnership agreements should be drawn up carefully with legal counsel, and signed by all partners.

Additionally, there should be a means in place of dissolving the partnership in the case of death, disability, or if one partner should want out of the business for any other reason, personal or professional. Sri Lanka, as a country with low individual income, general partnership would be an idle business type because it gives you pool of resources and financial encouragement to start a new business. Since family businesses are very famous in Sri Lanka, anyone can get together with his family and friends to form the business.

Since each partner has a vital contribution to the business, skills and abilities of them will guide the business to success. There are several businesses in Sri Lanka, engaged in all types of sectors such as; grocery, pharmacy, restaurant, book shop and laundry; which can be categorized into general partnership business type. Sri Lankan government has identified the importance of general partnership businesses, in terms of their contribution to the country’s development. So the government is encouraging this business community, to develop their businesses, by providing necessary financial aids, resources, equipment and guidance.

Case Study Analysis of LaJolla Software, Inc. Bus 600: Management Communications with Technology Tools Instructor: Sara Garski January 31, 2011 With the rapidly growing state of todays start-ups, fostering good overseas partnerships are essential in any business seeking to expand their company internationally. With such expansions, come becoming inter-culturally involved with those partnerships so that both party’s implicated can expand exponentially, building off one another.

In the Case Study of LaJolla Software, Inc. ; overseas expansion was laid out in their companies plans for months. Their intent? To deliver a new product launch that could potentially prove to be very profitable. But to achieve such aspirations they needed a business partner that knew the market in which they wished to serve. When the opportunity presented itself to make such a merger they knew it would take more than their companies most brilliant programers to take on the challenge.

And after constant visits to Japan, correspondence via fax, and many meetings with the interested shareholders and business partners of Ichi Ban Heavy Industries, the alliance was formed. Now all that was needed for the deal to be complete was for LaJolla to meet with Ichi Ban’s organizational management team where they were to learn more about their new partnership on the foreign territories of the United States. The problem, nevertheless, was communication; getting the Japanese to understand American culture and more importantly how LaJolla Software, Inc. unctioned in it. And being that their first partnership was with the Japanese they needed Ichi Ban to understand their purpose so that the two could unite as one solid entity of ingenuity for all of Asia to see. More specifically, here you have one company attempting to expand their products overseas. But in order for them to do so they need to first partner up with a company that is more knowledgeable of the territory in which they plan to expand. And after successfully attaining the partnership the problem that then arises is a cultural break down.

In order for the partnership to work they must overcome the communication barrier, and they’re relying on one Marketing Manager to make it all possible. The key issue with this company and their partnership is learning enough about their newly gained partners so that they can in turn impart knowledge of American culture in a way they can understand and interpret it. And so, for them to successfully maintain their business, as well as their new partnership, they’re going to have to figure out innovative ways to teach their counterparts American culture.

According to a Finance Discussion Forum (where questions are asked and answers are given by people either familiar with the topic or just sharing their opinion) five steps to successfully fostering a good overseas partnership are posted and listed below: learning the language learning the culture respecting the people and the country in which you plan to do business having eagerness to learn about the respective country and enjoying and making the most of the partnership

Although this posting is really just an opinion it does raise good points about establishing good business connections when branching out to partners over seas. In this list, some of the suggestions may be a little hard to committee to accomplishing so it is imperative to outline key points to accomplish in overseas relations. For LaJolla, some of those key points could be to focus on learning and having the eagerness to learn about Japanese culture all while making the most of their partnership with Ichi Ban.

For the marketing manager that is left with the single task of coming up with activities to engage their visitors he should first familiarize himself with Japanese culture, and asian culture in general. He should learn the signs of respect according to their culture as well as how they conduct business. Once he understands they’re key principles he’ll be able to get them to understand American culture. By being proactive and taking the initiative to learn their culture they’ll see that as a sign of respect and hey’ll want to learn more about the culture in which their company will be merging. In his quest to learn more about his foreign business counterparts he should also research Japanese business styles. And in an article entitled Japanese Business Styles it states, “Japanese communications are epitomized by subtlety and nuance… (their) body language is very minimal, making it difficult for the untrained observer to read. The(y) also seem to be very still in meetings, sitting in a formal upright posture… nd it is rare for any reaction or emotion to be visible. ” So taking this into account, knowing this tidbit of information could drastically help gauge what activities the marketing manager should plan for the visitors. After some investigation has been done, the planning of activities for the visiting Japanese organizational management team should begin. Starting with a dinner; taking them to a Japanese inspired restaurant absorbed in their culture would be a good way to break the ice and start discussions about the business venture.

This should then be followed up by a tour of some of the most important places near or boarding LaJolla, California. Such site-seeing could commence with visiting other similar software businesses (if permitted) and concluding their touristic trip with a tour of LaJolla Software, Inc. Now it may seem a little odd to see everything else first and the company they plan to work with directly last but doing it this way can help the visitors get a well rounded understanding of American business practice.

So when they do finally meet LaJolla Software, Inc. they’ll have an appreciation for what they do, what they have already accomplished, and what they wish to accomplish with the help of their new partners. Another thing that LaJolla could do as a whole, is have a staff meeting where the marketing manager would go about making the rest of the staff culturally aware of the new business partners as well. This is yet another thing the Japanese will take notice to and seeing the eagerness of the Americans could make for an easier transition.

In a PDF, entitled How to do it: Manage Overseas Business Relationships, it discusses the importance for the staff to “think carefully about what (their) foreigners might mean when they are using English” (pg. 5) With these key recommendations, these two very different businesses may actually be able to accomplish the goal they set out to do. Important facts to remember, however, is that the entire process will not be an over night success. In order for a bond to be forged and a good partnership fostered each party will have to work diligently in helping one another understand each other.

Works Citied Anonymous. Japanese Communication Styles. worldbusinessculture. com http://www. worldbusinessculture. com/Japanese-Business-Communication-Style. html Business Link. Manage Overseas Business Relationships. HOW TO DO IT: International Trade. Last updated: 01. 08. 10. http://www. businessandpatents. org/content/files/IT8 (1). pdf CoastalCutie. What are the essentials to working with overseas business partners? Finance Discussion Forum http://www. financialcrisis2009. org/forum1/Business-Finance/ What-are-the-essentials-to-working-with-overseas-business-partners-7. htm

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 duration that technically a general partnership terminates with withdrawal of a co-owner, death or disability and sharing profits.

Scenario 2

Renaldo and Naomi have just completed all educational and experiential requirements to be licensed as obstetricians. They want to open a birth clinic together.

They will take out a large loan to finance start-up costs (University of Phoenix, 2010). Renaldo and Naomi are newly license as obstetricians and want to open a birth clinic together. Both will need to take out a huge loan to finance their start-up amounts. Renaldo and Naomi would be best to create a limited liability partnership (LLP) to organize their business. By forming the LLP, the partners protect themselves from liability beyond their initial capital contribution should the partnership fail or face a lawsuit.

Members of an LLP are also not personally liable for the malpractice of one partner and states require LLP to carry substantial liability insurance in exchange for this limited liability. The limited liability protects Renaldo and Naomi from taking personal responsibility for the loan they will take out should the business become insolvent (Cheeseman, 2010). Forming an LLP ensures that Renaldo and Naomi retain control of their business because they are the only shareholders. For tax purposes, an LLP is not taxed as a separate entity so Akiva Renaldo and Naomi will only pay tax for the business profits on their individual tax returns.

To form their LLP, Renaldo and Naomi will need to write and file articles of partnership in the state in which they wish to operate. If they choose to conduct business in another state, they will first need to register as a foreign LLP with that state. Organizing their business as a limited liability partnership offers Renaldo and Naomi the best combination of liability protection, tax benefits, and control of their business (Cheeseman, 2010).

Scenario 3

Mei-Lin is the hiring manager for Surebuild, Inc., a new construction company. She has advertised a position as a jackhammer operator.

The position’s description states that the successful applicant must have a high school diploma. The following people apply for the position: Donna, 35, who appears to be pregnant, is a high school graduate, and was formerly employed as a jackhammer operator; Duane, 55, who is experienced with a jackhammer, but has no high school diploma; Rick, who is 38, does not speak English, has no high school diploma, but is experienced with a jackhammer; and Jennifer, 23, a college graduate, who is epileptic and has no experience with a jackhammer (University of Phoenix, 2010).

Duane and Rick automatically do not qualify because they do not have a high school diploma that is a specified requirement in the job description. Donna and Jennifer do because they each have a diploma and from there the employee with the most experience should be hired. As an epileptic the Americans with Disabilities Act (ADA) protects Jennifer, but because Donna has experience and Jennifer does not Donna is more qualified. Although Donna is pregnant the employment law and regulation with which the business must comply in making a decision would be the amended 1964 Pregnancy Discrimination Act from the Title VII of the Civil Rights Act.

The Pregnancy Discrimination Act covers employers with more than 15 employees including local and state government governments, employment agencies, labor organizations. The basis of pregnancy, childbirth, or related medical conditions constitutes unlawful sex discrimination under Title VII, and to the federal government. The Pregnancy Discrimination Act says that an employer simply cannot refuse to hire a woman who is pregnant because of pregnancy, pregnancy-related conditions or because of the bias of fellow coworkers or customers.

In this scenario Donna is fully qualified for the job because of her high school diploma and her previous experience as a jackhammer operator, therefore; pregnancy cannot be the reason she is not hired. Each business decision is unique and requires research to determine what solution is correct for the business. Every organization must consider the different types of business entities, laws, and regulations before and during operating. Laws and regulations provide the framework to compliance of local, state, and federal business laws.

Stakeholder understanding and knowledge of these laws is essential to compliance. Documented training and retraining of management and employees should ensure compliance.

References

1. Cheeseman, H. R. (2010). The legal environment of business and online commerce (6th ed. ). Retrieved from https://ecampus. phoenix. edu/content/eBookLibrary2/content/TOC. aspx? assetdataid=fb9bdcea-ca02-48cc-b883-c1cf12695559&assetmetaid=61859383-2c36-48f5-8ac2-4a24e5c61e14
2. University of Phoenix. (2010). Syllabus. Retrieved from University of Phoenix, BUS 415 website

Unique super shop is going to be launched as a partnership super shop business. The company owns and operates an industrial plant and is engaged on the business of making food products and is marketed through its own show room and agents all over Bangladesh. Here we all will work as a group & contribute capital and management expertise to the business enterprise and perform Joint responsibility for the operation of the business and for its debts.

Unique Super Shop’s principal activities are to collect cow milk from dairy firm, manufacture it by value change through proper process and modern technology so that it can meet the existing demand of milk among consumers. We are going to launched our business in urban area where people can not get fresh food particularly milk. Day by day they are losing their health stratus by taking unhealthy food. Our aim is to provide fresh food (Milk) to them which will be collected from various rural firms.

To serve its customer with highest level of satisfaction the company always give emphasis on meeting latent emand of the customers by introducing new and innovative products in the market. This is first time in Bangladesh we are introducing a super shop where all types of milk product or food is available in a single platform.

Business description

General description of the venture

For making a profit, we are some friend launching Unique Super Shop so this is the general partnership business. Our business can be based on written contact and legal oral agreement.

Where included name of the partner, Purpose of the partner duration of the business, how profit and loss will be istributed, salaries, absence contribution of each partner to the business etc.

The Reasons of Choosing Partnership

Ease of formation

A partnership is fairly easy to start. It is nearly as free from government regulation as a sole proprietorship. The cost of starting a partnership is low. It usually involves only a modest legal fee for drawing up a written agreement. Which in a highly desirable. An oral agreement is sufficient but not recommended. And that will be easy for us to establish our business. So we have chosen partner ship business.

More funds available

In a sole proprietorship, the amount of capital is limited to the personal wealth credit if the owner. In a partnership the amount of capital may increase significantly. A person with a good idea but little capital can look for a partner with the capital and lor credit standing to develop and market the idea. And we all have brilliant ideas with a little capital. So we have chosen partner ship business

Combined managerial skills

In a partnership, eople with different talents and skills may Join together. One partner may be good at marketing; the other may be expert at accounting; financial matters. Combining these skills could provide a greater chance of success. So we have chosen partner ship business.

Tax Advantage

It has some potential tax advantages over a corporation. Ina partnership as in a sole proprietorship, the owners pay taxes on their business earnings. But the partnership as a business does not pay income tax. So we have chosen partnership business.

A sole proprietorship is the easiest to form and the most common form of business. One advantage of this type of business structure is that it is quite simple and easy to start and launch. Another advantage is that the owner has complete control over the business and fairly easy tax preparation. Sole proprietorships have no hard regulation regarding registration and permission. One major disadvantage of a sole proprietorship is the unlimited personal liability of the owner. The owner is entitled to all of the profits, but Is also liable for any debts or losses.

A final disadvantage of a sole proprietorship Is that It is very difficult to raise capital to finance the company’s operations (Parole et al, 2012). Partnerships Partnerships are very salary to that of sole proprietorships except that partnerships consists of two or more owners. Each of the partners contribute to all aspects of the business. Partnerships fall into 3 different categories: general partnership, limited partnership and joint venture (Pairing et al. , 2012). Just like sole proprietorships, partnerships are easy and inexpensive to form.

Another advantage off partnerships is that each partner is equally invested into the business. The major disadvantage of a partnership is that partners share the business’s liability. Each partner is not only responsible for his or her decisions, but also for the decisions of the other partners. Secondly, all partners share the profits in a partnership (Pairing et al. , 2012). Corporations A corporations Is very deferent from sole proprietorships and partnerships. Corporations are owned by shareholders and are considered to be an Independent legal entity.

Corporations have very expensive administration fees and very complex tax and legal requirements. The main advantage of corporations is that the shareholders are not responsible for the debts of the company. They are only liable for their investment into the company. Corporations can also sell stock to raise any capital that is needed for the business. Corporations file a separate taxes from that of the owners. Owners of a corporation are taxes on the profits that the receive through salaries, dividends and bonuses.

One major disadvantage off corporation is that hey are very costly and time consuming to start and maintain. Sometimes corporations can be subjected to double taxes through taxes on profits and then taxes on dividends. Corporations require an increased amount of paperwork and record keeping. A final disadvantage of this kind of business structure Is that the business operations are handled by the managers and the board of directors who can cheat the owners of the business (Parole et al. , 2012). Choosing the correct business structure is an extremely essential part of the business formation process.

Starting up a business is never easy, especially when the market is constantly getting more crowded. It is increasingly difficult to find ways for your business stand out, and to forge the necessary relationships to help your business succeed in the early stages. But not all hope is lot.

Partnerships with other growing companies can help spark innovation among your teams and provide outlets for attracting new customers from a unique base of consumers. Every relationship formed must be a two-way street to ensure both parties are benefiting from the connection.

While there is certainly a point of diminishing returns with partnerships, especially with a small team to manage the relationships, a few key partnerships can make all the difference in the early stages of growing a company.

Here are the three types of partnerships we have formed at that have significantly impacted our business:

1. Cross-marketing

For successful cross-marketing partnerships, you want to find companies that offer a product that complements (but does not compete with) your product offering. In addition, you want to target companies that have a unique set of customers that fall within a similar target demographic. This was a particularly useful tactic while raising our initial funding on Kickstarter.

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Our sock company worked with a shoe company (complementary, but not competing, product) to promote their Kickstarter page to our existing backers, and they did the same for us. With so many projects added daily to Kickstarter, it is often difficult to stand out or be seen by potential backers but this partnership guaranteed incremental views to our fundraising page.

2. Retail outlets.

While our business was created as a direct to consumer ecommerce model, we quickly realized the value of creating local brand recognition, as well as increasing the routes to market. When considering retail partners, it was important to think about how to grow our brand in a unique way that would set us apart from competitors. We do have distribution in local boutiques that align with our style, but you can also find us in an upscale suburban pharmacy, as well as on display at a downtown hipster men’s grooming salon.

Having a variety of retail partners allows us to have a unique strategy with each of them to increase the number of new consumers introduced to our product, and to ensure each partner feels we are adding value to their business as well.

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3. Product collaborations

Product collaborations offer an opportunity to share brand equity and to cross-market to each brand’s existing consumer base. Our first collaboration is a co-designed sock with a local St. Louis brewery. With their help, we produced a sock that resonated with their fans and earned their commitment to sell the sock through their gift shop.

For each pair of socks sold (either in the brewery or on our website), we donate a pair of socks to a local homeless shelter. The collaboration and donation program has been well-received among loyal brewery customers, and has allowed both companies to gain awareness among each other’s followers. Collaborations open up a lot of opportunity to diversify our revenue stream, and strengthen our brand.

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Any potential partnership needs to be approached with careful consideration and clear communication, as managing these relationships creates additional complexities for your business. However, developing a small number of key partnerships, especially in the early stages of building a business, can be an incredibly valuable way to grow your consumer base and experiment with additional revenue streams.

By using this company it would give a clearer picture and nderstanding of the steps involved. The steps that are outlined in the report are as follows: Come up with a good business Idea Write a business plan (Approach lending Institution for funding) Decide on a winning name for your business Choose the form of business you are going to start Get a business License Register for taxes Prepare to have employees Buy other kinds of business Insurance Get your business records off to a good start There are different forms of business in todays society.

The group company Wadadli Jamz is owned by four individuals therefore the form of business being used is partnership. In this form of business the owners generally decides on the product, acquires the facilities, and brings together the labor force, capital, and production materials. If the business succeeds, the partners reap the reward of profits: If It falls, all the partners take the loss. A business must acquire a business license before they can operate legally within their country. In Antigua business licenses are issued by the high court of Justice.

Taxes are apart of every country, In Antigua a business must register to pay taxes. The Institutions that Issue these taxes are Medical Benefits scheme, Social Security and Inland Revenue. In most businesses employees are an essential part of the structure and development of the business. When starting a business you must prepare to have employees. Develop a method In which employees are hired. Each employee needs the skills and qualifications for the type of business you are operating. Operating a business.

Getting business records off to a good start will make it easier to manage the accounting and payroll of the company. Business Idea Our business idea came from Mr. Lucien Pilgrim’s love for Jams. He developed this craving from his childhood years when eating crackers and home made Jam at his randmother’s house. As he grew older he looked for that special taste in Jams at the supermarket. During his visits to several supermarkets he realized that there were more imported Jams being sold than Jams made with local fruits. He then decided to conduct a feasibility study about Jams being sold and manufactured locally.

The results from his study showed that 10% of Jams on the market were made locally. On further investigation it was revealed that senior citizens made most of the local Jams. These are done on a small scale. The recipes from these Jams are not passed on to the younger generation. Mr. Pilgrim then became very concerned that the recipes of the Jams he loved since childhood would soon be “buried in the grave” along with our ancestors. He then decided to start a business where he would keep the recipe and his culture alive.

He approached five people from the community to develop his idea: Jonathan Gilkes – He supplied the fruit trees & Recipes for the Jams Kareem Aska – Accounting and management skills & Successful Business Lawyer Annwareen Ramdin – Marketing experience They were all interested in his idea and decided to invest by putting in shares into the business. ANALYSIS Company analysis: Our goal is to make a profit while marketing a product via the internet and also our focus is to produce the best tasting Jam there is on the market. We have developed a fully functional website that has enabled customers to view the various flavors of jams being offered.