Business Entities, Laws and Regulations Paper

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Business Entities, Laws and Regulations Paper In forming a business entity one should research the best entity for the life of the business and the liability exposures that come along with certain types of business. Lou and Jose plan to open a sports bar and restaurant. These two don’t have much money to open the business but they have Miriam that is a wealthy investor and that will provide the capital to start business and in return receive a percentage ownership. I would recommend these partners to consider a Limited Liability Company it provides the bar and restaurant to be an “Limit Liability Company is a separate legal entity (or legal person) distinct from its members [ULLCA Section 201]” (Cheeseman, 2010, p. 267). Since Lou and Jose will running the day to day operations they can be managing partners of the operation and Miriam is also partner but not involved in the business operations but is exposed to all the liabilities of the business this seems to be best type of formation seems to be the best fit for Lou, Jose and Miriam. The bar and restaurant liability exposures are there. With a bar and restaurant you can be exposed to slip and fall accidents if the floor is wet from spilled drinks or food that was tossed onto the floor, selling alcohol to minors, fights and mounted T.V.’s not holding up. You also have the exposure of selling too much alcohol to one person. You must be familiar the ABC’s laws of serving alcohol in State of California. According to "California Department of Alcohol Beverage Control" (2011), "No. Every person who sells furnishes gives or causes to be sold, furnished or given away, any alcoholic beverages to any habitual drunkard or to any obviously intoxicated person is guilty of a misdemeanor. (Section 25602) ” (para. Q. 81), so it’s critical and crucial for Lou and Jose to know and understand the ABC’s laws and

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