Sanus Corpus

This is good stuff, we just don't know it yet. Why is this subject matter fun? Because it begins to tie together just about everything we have learned this semester. For instance, you could imagine some injuries that occur because of employee accidents $($torts & agency$),$ or you could probably envision some issues with contracts. And let's not even think about what happens if you should start a corporation which happens to make defective products $("$Who$\text{'}$s up for cleaning out ears with Q$-$tips?"$).$

Much like the introductory chapter to contracts, the text does a great job of beginning an in$-$depth analysis of corporations, specifically which ones could be best for the business$-$person in all of us$.$

Corporate $[$Bored$]$

The text does an excellent job at organization. When you are putting together your outline, I imagine seven sections: a$)$ sole proprietorships, b$)$ corporations, c$)$ limited liability companies $("$LLCs$"),$ d$)$ general partnerships, e$)$ limited liability partnerships $("$LLPs$"),$ f$)$ limited partnerships $("$LPs$")$ & limited liability limited partnerships $("$LLLPs$"),$ and g$)$ professional corporations. Then, underneath each section, filling in important information such as: a$)$ the structure of the business entity, b$)$ how you start the type of business entity, and c$)$ what liabilities come with the type of business entity

For instance, know the difference between a Close Corporation and an S Corporation. Similarly, know the differences between an LLC and a Corporation. As far as General Partnerships, how are they made, what is the liability, and how are they managed? The ways to terminate a partnership are equally important; specifically the comparisons that can be drawn to agency relationships.

I will be honest with you in that you do not need to spend much time thinking about LPs and LLLPs as they are rare $($just know the basic rules of liabilities$).$ However, you should know in detail the in$-$depth analysis of Professional Corporations. Lastly, take note of the very succinct and very important exam review at the end of the chapter. Final note: franchisees always lose. The franchisor $($common examples include fast$-$food establishments$)$ exert the power, and the local restaurants $($franchisees$)$ have to do what they are told.

Corporal Punishment

You are to start a business, but you need money. Thus, you walk into the PCC Bank and tell the loan officer, "I am starting a business and need a loan."

The officer will look at you and state, "Let me see your proposal."

This week, you need to put together a proposal for a business you would like to start. I am not asking for a novel; I am asking for details and evidence of well$-$thought planning.

Specifically, the loan officer will need to see:

a$)$ Your name $($and with whom you are partnering$)$

b$)$ The name of your business

c$)$ The purpose of your business

d$)$ The physical state where you will file the papers $($where you are forming the business entity$)$

e$)$ The type of corporation$/$partnership

f$)$ The details of the type of corporation$/$partnership you have chosen $($i$.$e$.$ LLC vs$.$ LLLP$)$

g$)$ The corporate$/$partnership structure $($even split, uneven split, managing rights?$)$

h$)$ The liabilities $($including taxes$)$ of your corporation$/$partnership

$[$You are to assume the loan is approved and your business is still trucking along $2($two$)$ years later.$]$

Now, apply both of the following fact situations to your business:

a$)$ "One of your employees, Nancy Drew, is out accomplishing the business of your corporation$/$partnership$.$ Nancy was driving the company car and was on his way to a client$/$distributor$/$supplier when she ran a red light and smashed into a Buick Regal. The driver of the Regal, Frank Hardy, was seriously injured and is now suing your corporation$/$partnership$."$

b$)$ "During the discovery stage of the Drew case, it is discovered your business partner was $($gasp$)$ writing company checks from his$/$her personal checkbook, using the company car for his$/$her personal business, and running his$/$her office from his$/$her garage on Main Street."

$-------------------------------------$

How's it going to end?

Be creative, be organized, and utilize the text where necessary. If you need any help, please don't hesitate to send me an email.