Explain business formations

Assignment Help Marketing Management
Reference no: EM1338071

Explain Business Formations

For business ethics and dilemmas in the hypothetical business situations below, discuss the basic elements of business formation:

A. Idea/vision for the business
B. Identify legal and regulatory issues to be considered in creating/modifying this business
C. What legal entity choice would you make for this business and why?

Business Situations:

a. Business Situation No. 1
Joe operates a commercial landscaping and tree trimming business. Joe is very successful and has enough clients to keep him busy, along with at least 50 workers, working six days a week. Occasionally, a client rents a piece of equipment from Joe's business. Clients sometime take their time paying for Joe's services and, therefore, Joe is sometimes late paying his bills. Joe's capital is only about $250,000, most of which consists of trucks and earth moving equipment worth approximately $200,000, plus an extensive assortment of lawnmowers, chainsaws, edgers, and other landscaping equipment. Last year's revenues exceeded $500,000. Many of the employees are seasonal and turnover is high.

Business Situation No. 2
Maury and Sons is an oilfield-drilling contractor. Maury has been dead for years and Monty and Max, two of Maury's grandsons, now operate the business as a general partnership. They contract with companies such as Exxon-Mobil and BP-Amoco. Last year's contracts exceeded $1 million in revenues, an all-time high. The partnership currently employs 50 people on oil-rig crews and 10 in administrative positions.

Monty and Max each own 25% of the business (they acquired their interests from their deceased fathers, Fred and Barney). Two aunts, Wilma and Betty, own the remaining 50%. Wilma and Betty, each in their early 80s, have no children.

The business was originally a sole proprietorship. Maury brought Fred and Barney into the business, yet there is no formal partnership agreement. Wilma and Betty have never been actively involved in the business, yet were given their interests after Maury's wife, Mable, passed away.

Monty and Max want to continue to expand the business and, eventually, sell the business to a "consolidator" (a company that buys local businesses, usually in exchange for a combination of stock, cash, and debt).

c. Business Situation No. 3
Three former employees of ChipeX, Inc. have developed a prototype for a new microchip to power the next generation of personal computers. They have assurances from venture capitalists that they will receive whatever financing is needed to manufacture the chip, provided they take 51% of the ownership interest. The venture capitalists do not want to interfere in the business operations and have agreed to allow the developers to control the operations, provided certain financial objectives are achieved. They expect to begin manufacturing of the chip within two years. Based on outside evaluations, the chip should be a success. The expectation is that the new venture will go public, or be sold to investors, within five years.

d. Business Situation No. 4
Five friends have gotten together to form a commercial construction business. Two of the friends have sizeable assets, but little construction experience. These two also have some experience in running companies. The other three friends have a small amount of capital to invest. Their major contribution to the group is that all three formerly worked for very successful homebuilders, and one individual headed the local division of a national construction company for the past two years.

Even with their combined savings, the group realizes that they will need to either obtain bank financing or outside investors. Bank financing will require that the five friends put up their personal assets as collateral. Outside investors will not demand personal collateral, but will demand control. The five friends believe that the company will be a success. Yet, even without having to give a bank personal collateral, they are concerned that if the business fails, they could lose everything they have accumulated.

Reference no: EM1338071

Questions Cloud

Calculating the slack for activities : Calculate the slack for activities A and D.
Ipo initial public offering : Explain how the Initial Public Offering (IPO) process works and its positive and negative aspects. Who benefits? How effective is the transfer of capital from savers to users (how much lost in the process)?
International business in poland : Discuss the examples of social/cultural risks in international business in Poland
Describe the factor which determine the slope : Describe the factor which determine the slope of the LM curve and whether an increase in theses factor(s) will make the curve flatter or steeper.
Explain business formations : Explain Business Formations and Identify legal and regulatory issues to be considered in creating and modifying this business
Underwriting costs : What is the spread on this issue in percentage terms? What are the total expenses of the issue as a percentage of total value(at retail)?
The statement of cash flow : What format did walmart use to present the statement of cash flow.
Two items which are complements in consumption : If you have two items which are complements in consumption and the price of one of them goes up, what happens to the demand of each of the items.
Explanation of venture capital and ipo : Can you please explain the difference between obtaining funds from a venture capital firm and engaging in an IPO?

Reviews

Write a Review

Marketing Management Questions & Answers

  Integrated marketing communication

Developing an IMC plan of Amazon that aims to create awareness and knowledge amongst Singaporean  consumers of the ethics involved in buying clothing made from Bangladeshi factories  .

  Multiple choice questions on e-commerce

The assignment in Computer Science or Information Technology is about multiple choice questions, particularly in e-commerce. Questions such as types of e-commerce websites, commercial websites, disintermediation, Platform for Piracy, the data that ca..

  Balanced scorecard for red lobster

The assignment in marketing is about Red Lobster, which is one US and Canada's most loved seafood restaurant. It has hundreds of outlets in US and Canada and it now wants to expand further. The approach adopted by Red Lobster has been discussed in fu..

  Marketing plan - marketing audit, swot and smart report

The assignment in marketing is about preparing a marketing plan. As part of marketing plan, the SWOT analysis, assessing the competitive position, identifying critical competitive issues, marketing objectives, strategy and actions have been suggested..

  Marketing plan

Marketing deals with preparing a marketing plan for either an existing product or a new product. Various aspects about launching a new product into the market are discussed ranging from the industry the product belongs to, goals and vision of the com..

  Yamato corporation analysis - harvard case study

Please refer to the PDF for the Case Study and questions.The case study from Harvard Business School is about Yamato Corporation, a parcel delivery company which provides door to door delivery in Japan.

  Marketing plan - create a new product

The assignment in marketing is about competitive analysis for a new product namely "heated insoles". These heated insoles can be put in shoes and they can protect the wearer's feet by keeping them warm during cold winters.

  Report on digital marketing strategy for a website

Promotion strategies of  the one's own developed website

  Integrated marketing campaign of mccafe

Integrated marketing campaign for McDonald's McCafe. McCafe has been launched in Canada. This is a case study which involves the use of digital marketing and social media marketing apart from regular marketing such as TV and radio. All these more are..

  New product development at adidas

In this paper, the researcher also determines the different kind of practices used by Adidas to manufacture shoes for its customers.

  Managing services in competitive environment

Services can be defined as separately identifiable, intangible activities which provide want-satisfaction when marketed to household consumers and/or industrial users.

  Prepare a marketing plan

A marketing plan is an essential tool for any marketer, providing direction for a brand, product or organization. A marketing plan describes the marketing environment, marketing objectives and marketing strategies.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd