Reference no: EM132219250

Legally Building a Business

Business Law 1 has informed you on principles and processes of law in business. By now you are (hopefully) well convinced that principles of contract law can articulate the basic elements of providing for goods and services in commerce. So far, this has tended to concentrate on what can pass between two or more parties to a contract. You have also learned how contracts can come into being, how they may be ended, or modified and, if breached, how they may be remedied.

The law of agency brings about the notion of how we can contract with others to extend the reach of our legal contracting capabilities through the actions of others on our behalf. This may involve the creation of agency through an actor that remains independent of our direct and continuous supervision. It may also develop into an employment contract for those that must come under our supervision and continuous control to achieve a good business result.

We can also need others to join their resources with ours to form a business enterprise of suitable scale to engage in certain kinds of commerce. This is the role of business organization law. This arena of law helps us to determine whether we should engage in business alone (sole proprietorship), with others in partnerships, or through the creation of an entity that can function as a person as a matter of law (corporation). Business organization resolves how ownership, control, liability and reward can be apportioned amongst many that are necessary to form a business.

Now, for the problem at hand:

Suppose now that you are a business consultant. The Acme Brothers and Sister have come to you for advice on forming a solar powered air conditioning (A/C) business. The Acme's indicate that they want to manufacture, distribute and install their patented solar A/C units. Of the three brothers, Nerdly is an engineer and inventor of the solar A/C; Slick is an experienced appliance sales manager; and Buckco is a successful and wealthy real estate developer. Amanda Acme is an accountant with many clients in distribution businesses.

The Acme’s want a business structure that maximizes the use of their particular skills and resources but also minimizes their liabilities. They also want a business structure that can easily acquire or engage the skills and resources the Acme's may lack but will need to be successful. And like most entrepreneurs each of the Acme’s want to maximize the respective fame and fortune that comes from founding and managing a successful and profitable high tech business.

1. Make a list of at least five important questions you need to ask all of the Acme's to give them the best advice on how to form their business to maximize their chances of success. Explain how the answer to each question will help you to advise the Acme's.