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Re: Business Formation of Potential Cardigan Home Store
There are a number of forms of business units that one can start operating their business. Some business organizations can be formed by one person, a group of people or even by the government .They have various features as well as advantages and disadvantages. This paper shall discuss the sole proprietorship, partnership and corporations form of business units.
The sole proprietorship is a business enterprise owned by one person who is referred to as a sole proprietor .They are the most common forms of business units. This is due to the fact that they are easy to start and the owner enjoys profits alone. However, the sole proprietor suffers the losses alone (Kelly, 2012).
Its advantages are; it is easier to form since there are fewer legal formalities required to start up the business. The sole proprietor is not required to submit business tax report which saves them from additional costs on accounting and tax filling. There is fast decision making since the owner has full control over the business decisions. However, the business owner is liable for any violations, losses or debts suffered by the business. In case of death, insanity or bankruptcy of the owner the business is dissolved. In addition, the owner has difficulty in raising capital given that they provide the initial funds and has limited access to loans.
The partnerships on the other hand, are owned by a minimum of two persons and a maximum of twenty. The partners raise more capital as each partner is entitled to capital contribution. They share workload and responsibilities as well as business risks and expenses. They harmonizing the different skills and contacts of each partner which makes them achieve greater financial results (Tracy, A., & Tracy, T., 2013).
Then again, the partners have to share the all the profits realized from the business. Yet again, they, one does not have total control over the business. Before decisions are made each partner has to be consulted which makes the decision making process slow. It does not have a separate legal entity from the business. In case of death, insanity or bankruptcy of one partner, it results in termination of the partnership.
As for the corporations, they have a limited liability. The members are not personally liable for the business debts, and assets. Once the business has been fully incorporated, the personal assets of the owners are protected from debt collection, law suits and other business issues that can arise. They have continuity. Owners’ death does not lead to its dissolution. Its disadvantages are that, the incorporation process can be time consuming and expensive. Many legal formalities have to be adhered to for the process to be complete. They also face double taxation. First, they pay the corporate tax on the profit, and then it pays dividends to the shareholders. It lacks secrecy as they have to submit tax returns and annual reports (Piotrowski, 2001).
The most suitable business organization for the Cardigans would be the corporation. Since they are beginning their practice, they will have liability protection. They may wish to s corporation status at the start of the business, when the business is likely to experience losses. The losses will be absorbed by the business rather than the business. Additionally, the corporation does not tax on its incomes. As compared to the sole proprietorship and the partnership business organization, the corporations have a limited liability and continuity of life, which is advantageous to them.
‘Cardihome Furnishings’ would be an appropriate name for Cora and Caley Home Décor store. ‘Homigans Fine Furnishings’ is close to ‘Home Fine Home Furnishings which may lead to confusion among potential customers willing to purchase the Cardigan family products instead of the other corporation’s products. Cora and Caley will have to fulfill the following filling requirements; the income tax, the estimated tax, the employee taxes and the excise taxes.
Kelly, M. (2012). Study guide for busn 5 by Kelly, Marcella, and ISBN 9781111826734. Place of publication not identified: Academic Internet Publish.
Piotrowski, C. M. (2001). Professional practice for interior designers. New York: J. Wiley.
Tracy, J. A., & Tracy, T. C. (2013). Small business financial management kit for dummies. Hoboken, N.J: John Wiley & Sons.
Bona Fide Occupational Job Qualifications
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Bona Fide Occupational Job Qualifications (BFOQs) are the employment qualifications that the law allows employers to take into consideration while making hiring and retention decisions. The law requires that the employment qualifications be concerned with an essential job duty that is a necessary part of business operation. Under the BFOQs, employers are legally allowed to hire employees based on sex, age, ethnicity, or national origin if there is sufficient proof that the aforementioned qualifications are an essential job duty or bona fide job qualifications (Beever, 2007). Although Title VII of the Civil Rights Act of 1964 prohibits the employers from making any form of discrimination against employees, the law provides exemptions where the employer is allowed to discriminate based on the nature or kind of the job. However on many occasions, exemptions are only allowed under narrow limits, and usually pertains to religion and gender of employees.
With regard to the above, CARDWARE does not have genuine BFOQs in its ad. For the BFOQs to be genuine, CARDWARE must be able to prove that an older person cannot be able to perform the duties of a younger person. From the case study, Petunia was middle aged and slightly plump, meaning she could be able to perform all essential duties once hired. The company’s slogan says that one doesn’t have to “be an athlete to look and feel like one.” This means that even though its line of sales is sportswear, anyone could still purchase these items and not necessarily athletes. In consideration of this, there is no legal ground for salespersons to be athletic as the ad requires. The sportswear could be sold to anyone. CARDWARE’s defenses could be that there was need to hire slender and younger employees who appear sporty. However, such a defense would not hold since not all athletes are slender or young, and even then older candidates could still perform the job well just like the younger employees.
If Petunia brought a lawsuit on negligence against CARDWARE and The Sporty One it would not hold. A negligence lawsuit can only be brought where one party fails to use reasonable care and causes harm to another one. Under negligence law, a person is liable if he/she fails to take some form of action that any reasonable person would take. In addition, a person is liable under negligence if he/she does something that a normal or reasonable person cannot do (Craig, 2007). The companies cannot be held responsible for Noah’s behavior since Petunia failed to act in accordance with the law. Petunia’s actions constitute harassment, as the best option for her was to seek legal redress. CARDWARE can use comparative negligence defense in this case. In this type of defense, the law analyses the percentage of negligence exhibited by both parties. CARDWARE had little to do with the confrontation that ensued between Petunia and Noah. In any case, the manager had explained to Petunia why she had not been hired.
Hetty Whitestone’s estate can claim that CARDWARE was responsible for Hetty’s death. This is because of the employer is held liable for employee’s acts or behavior. This may occur even if the employer was not directly involved in the physical harm of the other person. The court holds that employers direct employee behavior and thus the outcomes of employee behavior may also impact the employer (Craig, 2007). Employers are responsible for negligent acts of employees. CARDWARE’s defenses may be that Noah acted purely based on personal motives. Another possible defense is that the company exercised reasonable care.
Beever, A. (2007). Rediscovering the law of negligence. Oxford: Hart.
Craig, R. L. (2007). Systemic discrimination in employment and the promotion of ethnic equality. Leiden: Martinus Nijhoff.