Clark_11e-AM-Ch42.doc - 333 C HAPTER 42 L AW FOR S MALL B...

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Unformatted text preview: 333 C HAPTER 42 L AW FOR S MALL B USINESSES A NSWER TO C RITICAL A NALYSIS Q UESTION IN THE F EATURE INSIGHT INTO THE GLOBAL ENVIRONMENT—CRITICAL THINKING—INSIGHT INTO TECHNOLOGY (PAGE 865) Researchers are attempting to create technology that would allow Web site operators to screen out users from certain geographic areas. What global issues discussed in this feature might be less of a problem if such technology becomes cheap and effective? Businesses could find it possible to do business only in jurisdictions that they choose, which might limit the jurisdictions in which those businesses would be subject to suit. Content that a government or nation prohibits or otherwise finds objectionable could be screened from access by users within its geographic reach. Some trademark problems might also be avoided, at least among businesses that operate in limited geographic areas. A NSWERS TO Q UESTIONS AT THE E NDS OF THE C ASES CASE 42.1—QUESTIONS (PAGE 868) 1A. What might Mixon and the other members of Iberia Surgical have done to avoid the litigation and its ultimate result in this case? Initially, Mixon could have attempted to negotiate different terms in Iberia Surgical’s “Operating Agreement.” Termination of a member’s interest might have been permitted only with cause, for example, or the determination of the value of a member’s interest on withdrawal might have clearly been according to its “fair mmarket value,” as Mixon later asserted. When disagreement about the firm’s management practices arose, Mixon might have made more effort to curtail his objections or at least to compromise. The other members might have made similar concessions. They could have acquiesced to at least some of Mixon’s criticisms of their practices or have made other more concerted efforts to harmonize all of the members’ desires. When it became clear that the differences were not reconcilable, the other members might have offered Mixon a better price for the value of his interest on its buy-out. 334 UNIT EIGHT: BUSINESS ORGANIZATIONS 2A. Does the outcome in this case underscore the advantages or the disadvantages of the limited liability company form of business organization? Explain. The outcome in this case illustrates the advantages that the limited liability form of business organization has over some other forms, including the sole proprietorship and partnership. Had Iberia Surgical been a sole proprietorship, withdrawal from the firm by its owner would end its business and terminate it as an organization. Had the firm been organized as a partnership, a partner’s withdrawal could also have affected its business and might have terminated its organization, although the remaining partners could have reformed as a new partnership. If Iberia Surgical had been a corporation, the effects of Mixon’s withdrawal could have depended on his corporate status, but the buy-out of his interest, if it had consisted of stock in the company, could have been at least as contentious as it was in this case. Among thecompany, could have been at least as contentious as it was in this case....
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This note was uploaded on 03/17/2011 for the course LAW 1024066 taught by Professor K during the Spring '09 term at Fairleigh Dickinson.

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Clark_11e-AM-Ch42.doc - 333 C HAPTER 42 L AW FOR S MALL B...

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