Business Entities, Laws, And Regulations Essay

1201 WordsFeb 16, 20125 Pages
Business Entities, Laws, and Regulations BUS/415 February 6, 2012 Business Entities, Laws, and Regulations When starting or operating a business, owners face many challenges such as choosing carefully whom they hire and several liability issues. They also have many choices to make like where and how to establish the type of business entity to become, and what kind of requirements they need to hire the right people. The choices the owners make can make or break their companies. Business owners who are aware of every business law and regulations have great potential of their company becoming safe and successful. This paper will evaluate the scenario of three businesses, a sports bar, a birth clinic, and a constructions company. In addition, the paper will cover employment laws and regulations with which each business must follow when making important decisions. Scenario One (Restaurant/Bar) Jose and Lou wants to open a sports bar and restaurant. The two do not have much money to get started. Miriam does not have time to start or run the business but does have the money. She wants to provide capital to start the business, and wishes to receive a percentage of ownership. In this scenario the business that will best suit this establishment is a manager-managed Limited Liability Company (LLC). Jose and Lou will perform as managers and manage daily business operations. Miriam, on the other hand, will be a nonmember who has no control of the business unless the operating agreement states otherwise (Cheeseman, 2010). According to Cheeseman (2010), when functioning has an LLC, the government taxes the entity as a partnership unless the LLC chooses to have the government to tax them as a corporation. Therefore, the government does not tax an LLC at the same level as an entity, but an LLC’s income or losses to each owner’s individual
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