The Legal Environment of Business: Text and Cases (MindTap Course List)
10th Edition
ISBN: 9781305967304
Author: Frank B. Cross, Roger LeRoy Miller
Publisher: Cengage Learning
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Chapter 16, Problem 1IS
Summary Introduction
Case summary:Person F opened a store using his own investment and employed two other persons. He predicted that business would make profit approximately after three years and after that person F would expand his business.
To find: Sole Proprietorship be an appropriate form for person F’s business
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1. Goldie and Hattie want to develop real estate and want to organize it under their state's Revised Uniform Limited Partnership Act.
(a) Please advise Goldie and Hattie about what they will need to create and capitalize their partnership. (b) What advantages does
the limited partnership business form offer to them over the general partnership? (c) What should Goldie and Hattie expect about
their personal liability and tax situation?
To Partner or Not to Partner
John Willis, who is 27 and single, had just completed his fifth year of employment as a carpenter for a very small homebuilder. His boss, the sole owner of the company, is Tyrone Young. A few days ago, Tyrone asked John if he would like to become a partner, which he could do by contributing $70,000. In turn, John would receive 40 percent of all prof- its earned by the business. John had saved $30,000 and could borrow the balance from his grandmother at a low-interest rate, but he would have to pay her back within 15 years.
John was undecided about becoming a partner. He liked the idea but he also knew there were risks and concerns. He decided to talk to Tyrone at lunch. Here is how the conversation went.
John: I've been giving your offer a lot of thought, Tyrone. It's a tough decision and I don't want to make the wrong one. So I'd like to chat with you about some of the problems involved in running a business.
Tyrone: Sure. I struggled with these issues…
Lily wants to build a business. She has very little capital. She does, however, have a partner with which she could run a business. Lily wants to be able to avoid being held personally liable for any problems the business has. Which of the following would lead Lily to choose a sole proprietorship organization for her business?
A. None of the above
B. Avoidance of personal liability
C. Possession of a partner
D. Little capital
Chapter 16 Solutions
The Legal Environment of Business: Text and Cases (MindTap Course List)
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Similar questions
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