Select one question for part 1 answer part two Part IScenario 1 - Forms of Business Organizations

Select one of the scenarios listed below and explain the best solution for each. Include comments related to any ethical issues that arise. You should locate at least one credible source from the SUO Library or one lawsuit (case) that has been decided or is currently pending to support your answer.

Barkley and Calvin are partners in a successful home health care business and are considering the possibilities of expansion. Barkley has been attending college to study management. Barkley would like to cut back on his patient responsibilities when she graduates to take on more of a management role in the business.  

Calvin suggests that they hire Katrina as an employee because she has some experience and could pick up the work Barkley was doing. Katrina would like to become a full partner.

• How would you advise Barkley and Calvin when they come to you for advice about the best type of business organization for their home health care business? Explain your reasoning. Consider at least one limited liability option in your response, such as the LLC or LLP.

Scenario 2 - Corporate Formation and Shareholder Liability

Linda Lawson, a well-known local entrepreneur, owned several businesses that filed for bankruptcy from 2009 to 2015. Last year, Lawson established L.L. Renovations, Inc. Lawson is the sole shareholder and invested $3,500 in the company as a capital contribution. L.L. Renovations, Inc. purchased a building for the office, 2 vans and supplies using a $500,000 loan obtained from the bank. Lawson planned to renovate older homes in an area that did not have space to build new homes. Lawson skipped several payments on the bank loan and did not pay some of her contractors.  As one of L.L. Renovation's creditors, you seek to hold Lawson personally liable for the debts of the company.

• Will you be successful in holding Lawson responsible for the company's debts? Explain why or why not.

Part II

Select any form of business organization studied this week and make business that sells at least one tangible product, such as books or food, or provides a service, such as pet grooming or daycare. You must make new business, not one you already own or someone else owns. You will continue to build this business each week. In two to three paragraphs provide the following information about your business.

• Name of business
• Description the product or service and why it was selected
• Location of the principal office-in california
• Type of organization (sole proprietorship, partnership, LLC, S corp, etc.) and why that form of organization was selected
• Advantages and disadvantages of the form of organization selected
• Legal requirements for formation of the business in your state. Cite sources from the state, as applicable.