Phil, Aaron, and Jeff decide to form a lawn care/snow removal business. They come to you,...

Phil, Aaron, and Jeff decide to form a lawn care/snow removal business. They come to you, knowing you took a business law class in college, for advice on business organizations. The three men are concerned about potential liability for the business’ torts and contracts. None of them have ever driven a lawn mower or a snow plow so they want to make sure that if one of them runs into a client’s house, takes out some mailboxes and power lines, or injures an innocent bystander that they will not subject their own personal assets to liability. Answer the following.

a. Explain the risks of personal liability of each person if they are all general partners in a general partnership.

b. Explain the risks of personal liability of each person if Phil, Aaron, and Jeff become equal shareholders in a corporation.

Expert Solution

a. Explain the risks of personal liability of each person if they are all general partners in a general partnership.

A general partnership is formed when a group of individuals agree to share all profits, losses, assets and liabilities of the partnership. The liability in general partnership is unlimited for each partner, which means that if partnership has a liability, then the partner is not just limited to his share of capital in partnership, his personal propoerties will also become liable to settle the liabilities of the partnership. Now this liability of partnership could be due to carelessness of one partner, but alla other partners will be equally liable according to their profit sharing ratio.

b. Explain the risks of personal liability of each person if Phil, Aaron, and Jeff become equal shareholders in a corporation.

A corporation unlike general partnership is a seperate legal entity. That is the corporation has seperate legal existance from the shareholders. Shareholders of a corporation have limited liability, that is the shareholders are only liable to corporation's liability upto the value of shares held by them. So shareholders personal property cannot be held liable if the company defaults in any payment.

ekkarill92 answered 2 years ago

The Weemow Lawn Service wants to start doing snow removal in winter when there are no...

The Weemow Lawn Service wants to start doing snow removal in winter when there are no lawns to maintain. Jeff and Julie Weems, who own the service, are trying to determine how much equipment they need to purchase, based on various job types they have. They plan to work themselves and hire some local college students on a per-job basis. Based on historical weather data, they estimate that there will be 6 major snowfalls next winter. Virtually all customers want...

Question #2: McAndrew’s Snow Removal is a small, family-owned snow removal business. For its services, a...

Question #2: McAndrew’s Snow Removal is a small, family-owned snow removal business. For its services, a flat fee of $14.75 per hundred square meters is charged. The son (Conor) of the owner of McAndrew’s Snow Removal has recently learned about ABC in her university accounting course @ Dal. He is starting to wonder whether the company is losing money on certain jobs, specifically jobs that require a significant amount of travel time. He decides to do his first co-op job...

Steve Russell started a snow removal and landscaping business he called Total Care Services. Selected transactions...

Steve Russell started a snow removal and landscaping business he called Total Care Services. Selected transactions for Total Care Services are listed below. 1. Steve transfers his used pickup truck valued at $3,560 into the business. 2. Steve invested $3,150 cash in the business and opened a bank account in the name of Total Care Services. 3. Purchased a used snow plow from a dealer for $1,520 paying half as a down payment and half on account. 4. Plowed the...

Write a Puropse for a business proposal. The business is a lawn care services.

The snow removal business in East Icicle, Minnesota is a competitive industry. All snowplow operators have...

The snow removal business in East Icicle, Minnesota is a competitive industry. All snowplow operators have the cost function C = Q2 + 25; where Q is the number of driveways cleared. Demand for snow removal in the town is given by Qd = 120 - P. The long run equilibrium number of rms in this industry is(a) 120(b) 29(c) 56(d) 58(e) 59 (Please show work or explain. I already have the answer. just need to know how to solve...

enosha Winter Services is a small, family-owned snow-removal business. For its services, the company has always...

enosha Winter Services is a small, family-owned snow-removal business. For its services, the company has always charged a flat fee per hundred square metres of snow removal. The current fee is $11.60 per hundred square metres. However, there is some question about whether the company is actually making any money on jobs for some customers—particularly those located on more remote properties that require considerable travel time. The owner’s daughter, home from school for the summer, has suggested investigating this question...

Can you describe the main competences of Jeff Bezos? To do so, you can come to...

Can you describe the main competences of Jeff Bezos? To do so, you can come to the list of competences below : 1. Working in teams 2.Analytical thinking 3.Strategic thinking 4.Creative thinking 5.Business development 6.Influencing others 7.Change management 8.Effective communication

Mower-Blower Sales Co. started business on January 20, 2016. Products sold were snow blowers and lawn...

Mower-Blower Sales Co. started business on January 20, 2016. Products sold were snow blowers and lawn mowers. Each product sold for $1,400. Purchases during 2016 were as follows: Blowers Mowers January 21 20 @ $ 800 February 3 40 @ 780 February 28 30 @ 760 March 13 20 @ 760 April 6 20 @ $ 840 May 22 40 @ 860 June 3 40 @ 880 June 20 60 @ 920 August 15 20 @ 860 September 20 20...

Kimberly Payne and Arionna Maples decide to form a partnership An unincorporated business form consisting of...

Kimberly Payne and Arionna Maples decide to form a partnership An unincorporated business form consisting of two or more persons conducting business as co-owners for profit. by combining the assets of their separate businesses. Payne contributes the following assets to the partnership: cash, $24,560; accounts receivable with a face amount of $161,390 and an allowance for doubtful accounts of $4,490; merchandise inventory with a cost of $84,060; and equipment with a cost of $137,580 and accumulated depreciation of $45,680. The...

Bob, Frank and Jane are equal partners in a lawn-care business. Frank and Jane wanted the...

Bob, Frank and Jane are equal partners in a lawn-care business. Frank and Jane wanted the partnership to borrow some money from the bank to buy more equipment for the business. Bob was against the idea. When called to a vote, Frank and Jane voted yes. Bob voted no. Will Bob be held responsible on the loan? Can Frank and Jane exclude Bob from the loan proceeds? If the business fails, who can the lender sue Bob? How has this...

Question