Describe the relevant law

Assignment Help Business Law and Ethics

Reference no: EM133312787

Assignment:

Consider the following scenario:

Karen decides to open a new venture, "Karen's Bar, Grill, and TV Lounge." It will feature dozens of flat screen televisions with three installed in each booth. She decides that she will run the business as a Limited Liability Company (LLC) to avoid any personal liability. She names the LLC "Sketchy Karen's, LLC." Other than the initial Articles of Organization, Karen never files any additional documentation with the State. Karen intentionally does not direct a lot of cash towards the business. She figures that if it fails, she will only be out her initial investment.

The business never makes a profit. It only stays running because Karen keeps using her own funds to pay for business expenses. In addition, Karen lets the business use 156 televisions that she and her husband Tom personally bought. Karen pays all of her employees cash, without withholding any taxes. Likewise, she does not maintain any workers compensation or additional insurances for their benefit. To further reduce her overhead, Karen recently dropped the company's liability insurance. She was heard laughing and saying "Let 'em sue the business...it doesn't own anything."

When Karen needs cash, she takes it directly from the till, without documentation. Since she doesn't have a separate account for the business, she figures she doesn't need the hassle of writing it all down - "It's all mine anyway" she says.

Last month, a customer fell while leaving the business. The customer was severely injured. Is the customer able to sue Karen individually (in addition to the LLC)? Why or why not? Your analysis should describe the relevant law and analyze the factors that a court might consider (hint - see the materials relating to Piercing the Corporate Veil).

Reference no: EM133312787

Questions Cloud

Risk avoidance and risk reduction : Identify one specific technique from each of the two broad categories (Risk Avoidance and Risk Reduction)

Compare rational decision making process : Compare the rational decision making process with the control process.

Does the defendants conduct constitute a breach of contract : Is the defendant unfairly generating revenue at the expense of consumers? Does the defendant's conduct constitute a breach of contract?

Propose to executive management : Using models studied in the class explain how you will go about identifying the correct solution to propose to executive management.

Describe the relevant law : Is the customer able to sue Karen individually (in addition to the LLC)? Why or why not? Your analysis should describe the relevant law.

Created the public company accounting oversight board : The Sarbanes-Oxley Act created the Public Company Accounting Oversight Board (PCAOB) because it was concerned that.

Government or world leader while addressing crisis : What is an example where ERM was used effectively by a government or world leader while addressing the crisis?

Thinking and use of statistical often fail in the workplace : Why does statistical thinking and the use of statistical often fail in the workplace (give 3 reasons)? How can you mitigate against such failures?

Define the different types of audits : Define the different types of audits. What is the theme common to all audits?

User Account

All Pages