Business Entities, Laws, and Regulations This Paper Essay

Business Entities, Laws, And Regulations

This paper will focus on the challenges faced by one start-up businesses and an established company with labor issues. For the start-up, a birth clinic, a case needs to be made for the type of business entity they should each use. The established company is a construction company whose business entity must be identified and employment law pertaining to the scenario will be discussed. For each business, identification of the best business entity for the given situation needs to be accomplished first. The decision of the type of business entity will take into consideration control, taxation, and liability issues. Review of the laws and regulations that each ownership group must consider and identification of risks that the businesses should protect against will be discussed. Review of the construction company's business structure and how it affects control, taxation, and liability issues along with how employment law impacts the current scenario is focused on.

In examining the birth clinic identifying the ownership structure and control issues will determine of the proper business entity be used. Below is the information provided:

"Akiva and Tara 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"

The proper business entity for Akiva and Tara is a limited liability partnership (LLP). The reason for this is that it provides limited liability to the extent of their capital contribution to each of the partners for negligence performed by the other partner. However, the partner that causes the negligence can be held personally liable for their acts. The LLP is specifically designed for professionals, lawyers, doctors, etc. that want to go into business together.It is a requirement in many states that LLPs carry liability insurance of at least $1 million this is to cover any malpractice suits that may occur and to insulate the partners from personal liability.

Like the limited partnership discussed earlier the LLP is taxed via the "flow- through" method. Akiva and Tara must sign and execute documents in order to form the LLP in this case it is called articles of partnership that must be filed with the office of the secretary of state. The articles must state the name of the partnership, duration of the partnership and other information as required by the state (Cheeseman, 2010).

The scenario for the construction business requires a review of the business entity which is a corporation. This review includes taxation, control, and liability issues that affect corporations. Discussion of employment law as it pertains to the scenario will follow. Below is the information provided in the scenario:

"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: Michelle, 35, who appears to be pregnant, is a high school graduate, and was formerly employed as a jackhammer operator; Eric, 55, who is experienced with a jackhammer, but has no high school diploma; Felipe, who is 38, speaks no English, has no high school diploma, but is experienced with a jackhammer; and Nick, 23, a college graduate who is….....