Business Entities, Laws, and Regulations

Business Entities, Laws, and Regulations Paper

Name

University of Phoenix

Business Entities, Laws, and Regulations

Business today is unique in that there are many different types of structures, laws, and regulations that allow them to operate in what the owners need to be efficient and competitive. They basically have to take note on how they are controlled, liability in doing business, and how the business and owners will be taxed. While depending on what type of business, there will be different rules, laws, and regulations that may apply to their business, they need to also realize that their decisions may carry different amount of risks. So we will look at three different scenarios and see the approaches each may need to become successful.

Restaurant/Bar Scenario

This business will have three owners, with two of the owners running the day to day operations in Lou and Jose, while Miriam is more a silent partner with the biggest money investment. Miriam while having the most money to invest, also does not have much time to be involved in all the business transactions and would prefer to just receive his share of the profits. With three owners this business needs to pick the right business entity to be successful, it should be organized within a limited partnership, since one owner will not have any dealings with the daily operations. Cheeseman (2010) states that the partnership should file a document stating their information, their income information as in the amount they can lose or earn from the partnership. Lou and Jose will need to take the responsibility for all regulations; rules and laws are complied with since Miriam more an investor in the business. With the daily operations being run by two of the owners, they also need be ready to adjust to the social needs of where the business is located, they need to set the example of ethical and moral behavior so the business can succeed. With a restaurant/bar come many potential problems, from serving alcohol, possible rowdy customers, food poisoning, and liability problems from many different sources. Failure by the two owners to regulate the way it is run could close the business, something as simple as serving an underage person a drink could cost them their license or whole business. With this business having so many potential liabilities the formation of the Limited Liability Partnership allows each owner to only to lose their capital involvement, this will keep each partner from possible problems if the business as a problem in the future.

Professional Practice

Akiva and Tara want to start a business together right after getting their licensing to become obstetricians. This business should be formed as a Limited Liability Corporation, since it will allow both Akiva and Tara to avoid liability from the large loan and other legal issues like malpractice, slip and fall, and any employee issues if the LLC is sued. LLCs are popular because, similar to a corporation, owners have limited personal liability for the debts and actions of the LLC; other features of LLCs are more like a partnership, providing management flexibility and the benefit of pass-through taxation (IRS, 2011). This will allow them to expand in the future if needed by adding others to the LLC, but also make it easier for taxes, licensing, and other daily expenses since together. Will also allow them to hire and train their employees in the right procedures to care for both mother and child and to avoid any possible incidents. Since a LLC can have any number of members from new doctors, to corporations, and even other LLC's it will allow them if needed to move to other possible health care areas in the future.

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