Question

Jeb and Josh are lifelong friends. Jeb is a wealthy wind-power tycoon, and Josh is an active outdoor enthusiast. They have decided to open a sporting goods store, Arcadia Sports, using Jeb’s considerable financial resources and Josh’s extensive knowledge of all things outdoors. In addition to selling sporting goods, the store will provide whitewater rafting, rock-climbing, and camping excursions. Jeb will not participate in the day-to-day operations of the store or in the excursions. Both Jeb and Josh have agreed to split the profits down the middle. On the first whitewater rafting excursion, a customer named Jane falls off the raft and suffers a severe concussion and permanent damage to her spine. Meanwhile, Jeb’s wind farms are shut down by government regulators, and he goes bankrupt, leaving extensive personal creditors looking to collect. Specifically, the following critical elements must be addressed: A. Identify the main types of business entities and discuss the advantages and disadvantages of each. B. Recommend a specific business entity for Arcadia Sports and include your reasoning. C. Based on the characteristics of each type of business entity, determine the type under which Jeb and Josh would be personally liable to Jane for damages. D. Based on each type of business entity, analyze the ability of Jeb’s personal creditors to seize the assets and/or profits of Arcadia Sports.

This class is Business Law I

Answer 1

Answer:-

A) The primary business entity is sole ownership. Its favorable circumstances is They are anything but difficult to frame, and the proprietors appreciate sole control of the business benefits. In any case, they likewise have inconveniences, the greatest of which being that the proprietor is by and by subject for all business misfortunes and liabilities.

The fundamental burdens to being a sole ownership are: Unlimited risk: Your independent venture, as a sole ownership, is actually obligated for all obligations and activities of the organization. In contrast to a partnership or a LLC, your business doesn't exist as a different lawful entity.

Next business entity is association. Its focal points are Businesses as organizations don't need to make good on annual expense; each accomplice records the benefits or misfortunes of the business on their very own personal government form. Along these lines the business doesn't get exhausted independently. Simple to establish.and impediments is the risk of the accomplices for the obligations of the business is boundless. each accomplice is 'mutually and severally' at risk for the association's obligations; that is, each accomplice is subject for a lot of the organization obligations just as being at risk for all the obligations.

Next business entity is constrained obligation organization. Its preferences are that the accomplices are not by and by at risk and can't be compelled to pay a business obligation or obligation with individual property or resources. Their own benefits would be protected from all business liability.

Disadvantages. Independent work Taxes: This implies the benefits of the LLC won't be saddled at the corporate level, however will go through to its individuals who will represent those benefits on their own government assessment forms. As a rule, these expenses are higher than they would be at the corporate level.

Next business entity is C enterprise. Its focal points are Owners don't have individual obligation for obligations of the company. An investor just dangers the measure of the interest in the company.Has more access to money related assets. A company can offer stock to raise capital, acquire bank advances or issue bonds for long haul financing.

Partnerships are better ready to pull in more gifted and talented workers than proprietorships.The organizations keeps on existing independently from the lives of its stockholders.Disadvantages are C Corp is the most mind boggling business structure and requires a legal counselor to set up.Earnings could be liable to twofold tax collection.

B) A controlled commitment organization would be an ideal reference for Jeb, Josh, and Arcadia Sports. Jeb fills in as the buddy who gives the most money related assets and since he as of now has a productive breeze influence business he won't be engaged with the everyday activities. Josh, then again, fills in as the topic master on everything outside and outdoor supplies and he will work the business.

Right now, obligation insurance is a decent selling point and right now organization, structure shields singular accomplices from claim risk for thoughtless demonstrations of different accomplices or workers not under their immediate control. Another incredible part of a LLP is that individual accomplices are not answerable for organization obligations.

C) Based on the characteristics of each sort of business entity, Jeb and Josh would be by and by subject to Jane for harms under an association. Underneath an aggregate, the two accomplices are independently responsible for all misfortunes joining the misfortunes of their accomplice so right now the prey recoups enough to sue Jeb and Josh will both endure the worst part of the harms.

D) As dependent on my examination, the main business entity that would permit Jeb's own leasers to hold onto the benefits/benefits of Arcadia Sports would be a general association.

Right now, Jeb's leasers can acquire the recuperation against both Jeb and Josh as each accomplice is by and by at risk for each accomplice's obligations.

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