D078 Task 2 Pass

D078 Task 2 A. Compare two of the proposed legal entity types for the farmers market venture by doing the following: 1. Describe one of the legal entity types for identified in the scenario (I.E., Corporation, Limited Liability Company (LLC), or General Partnership) and then describe how it would affect each of the following factors in the context of the farmer’s market: In this scenario the local farmer and supermarket are going to form a general partnership. “A general partnership is a business arrangement by which two or more individuals agree to share in all assets, profits, and financial and legal liabilities of a jointly-owned business”(Bloomenthal). Basically, the farmer and the supermarket will be splitting all profits, and losses and equally be responsible for all debts and liabilities. Taxation: With being involved in a general partnership, every partner is responsibly for reporting their profits, and losses to the IRS. The business itself will not be paying taxes, each partner will file their own profits, and losses on their personal tax returns. Taxes tend to be a little easier to file with a general partnership than if you were to file as a business. Liability: Both parties will share in the debts, and liabilities of the company, just as they will share equally in all profits, and rewards. Both partners will be equally responsible for all loans, accounts payable, deferred revenues, bonds, warranties, and accrued expenses. Ownership & Control: In this scenario both partners have equally shred ownership and control of the business. Although, they seem to be having different approaches as to how to run the business, they will need to learn to work together. With working together, the goal would be to reach a compromise that works for both partners. 2. Describe one legal entity type identified in the scenario (i.e., Corporation, Limited Liability Company (LLC), or General Partnership) that is different from the one described in part A1 and then describe how it would affect each of the following factors in the context of the farmers market: Another option would be to structure the business as a corporation. “A corporation is a legal entity that is separate and distinct from its owners”(Berry-Johnson). Corporations are sometimes known as a “legal person” as they can enter contracts, loans, sue, be sued, hire employees, have assets, and pay taxes. Taxation: In a corporation scenario the business would be it own “person”. All taxes would be independent from all partners. All partners would only be taxed on dividends earned. Liability: In this scenario the farmer may be worried about limited personal liabilities if the business is not successful, but the farmers liabilities is limited to his investments. All taxes, and legal issues would be pinned against the company. Ownership & Control The corporation scenario does not necessarily work for the farmer as he would like to keep control of the company. Entering into a corporation, ownership would not only be between the farmer and supermarket anymore, but it would also now be distributed between investors. B. Describe the legal and ethical obligations the employer in the scenario has by doing the following: 1. Describe one legal obligation the employer in the scenario has, according to one of the following laws: If you were to use the fair labor standards act, the employer would have certain laws to follow. The employer would have to follow all the rules, and requirements of the fair labor standards act, including but not limited to proper overtime pay after 40 hours in a work week, and meeting the minimum wage standards. If these rules were not followed the employer would be in violation of the fair labor standards act. 2. Describe an ethical obligation the employer in the scenario has that is different from the legal obligation described in part B1. Choosing between what is right and wrong, and moral or immoral are known as ethical obligations. In this situation the supermarket manager wants the employees to hide damaged produce under good produce, the employee knows that this is unethical. The employee has informed the manager that misleading the customers for sales is unethical, and over time could lead to lost business. C. Describe one ethical obligation of the employees in the scenario. In this scenario the employee also has some ethical standards to follow. The employee should not be cheating the time clock by clocking in earlier or later than the work they are putting in. The employee should also uphold the standards, of the market. For example the employee should not be hiding damaged fruit under good fruit, instead they should be disposing of it properly.