Select ONE of the scenarios below and explain the best solution. List possible alternatives and provide reasons why your solution is best. Include comments related to ethical issues that may arise.
Scenario 1
Mike Sanders is an extremely wealthy entrepreneur who previously owned several businesses. Sanders sold some of the businesses, while others failed and ended up in bankruptcy. Most recently, Sanders incorporated Sunshine Home Designs with himself as the sole shareholder. Sanders invested $2,500 in the company as a capital contribution. Sunshine Home Designs then purchased 500 acres of land for $250,000 with the intent to develop an upscale retirement community with various levels of housing from patio homes to nursing facilities. One year later, Sunshine became unable to pay its bills. As one of Sunshine’s creditors, you seek to hold Sanders personally liable for the company’s debts.
Mike Sanders is an extremely wealthy entrepreneur who previously owned several businesses. Sanders sold some of the businesses, while others failed and ended up in bankruptcy. Most recently, Sanders incorporated Sunshine Home Designs with himself as the sole shareholder. Sanders invested $2,500 in the company as a capital contribution. Sunshine Home Designs then purchased 500 acres of land for $250,000 with the intent to develop an upscale retirement community with various levels of housing from patio homes to nursing facilities. One year later, Sunshine became unable to pay its bills. As one of Sunshine’s creditors, you seek to hold Sanders personally liable for the company’s debts.
Will you be successful in holding Sanders liable for Sunshine’s debts? Explain why or why not.
Scenario 2
Angelo and Jimmy own a successful sandwich shop. The two partners propose expanding their business by opening a new sandwich shop close to the college campus this year and possibly a third shop in a fast-growing suburb next year. Angelo is a Certified Public Accountant who does consulting from home when he is not managing the sandwich shop. He would like to quit the consulting business and manage the new campus store full time.
Angelo and Jimmy own a successful sandwich shop. The two partners propose expanding their business by opening a new sandwich shop close to the college campus this year and possibly a third shop in a fast-growing suburb next year. Angelo is a Certified Public Accountant who does consulting from home when he is not managing the sandwich shop. He would like to quit the consulting business and manage the new campus store full time.
Jimmy suggests that they hire Tonya to run the new shop because she is younger and has a lot of experience working in restaurants. Angelo and Jimmy currently operate as a general partnership. When the partners talk with Tonya, she suggests that she would like to become a full partner. How would you advise Angelo and Jimmy when they come to you for advice about the best type of business organization for their sandwich shops? Explain your reasoning.
Discussion Question Part II
Select any form of business organization and create a business that sells at least one tangible product or provides a service. You will continue to build this business each week. In two to three paragraphs, provide the following information about your business.
- Name of business
- Type of product or service
- Location of the principal office
- Type of organization (sole proprietorship, partnership, etc.) and why that form of organization was selected
- Advantages and disadvantages of the form of organization selected
- Legal requirements for formation of the business in the state where the principal office is located
just curious to how to do this
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