FINAL EXAM Essay Example | Topics and Well Written Essays - 750 words

FINAL EXAM - Essay Example This separates personal assets from business assets hence cannot be involved in lawsuits. The other advantage is that cooperate business has a continuity agreement, in that even if one member dies the other shareholders still have it alive. Disadvantages come in when it is required to file many legal documents such as the certificates and articles of incorporation, which may take long and is cumbersome. Another major disadvantage is that cooperate business do get tax deductions when distributing dividends, and this eats up into shareholders earnings. Question 3 "To pierce the corporate veil" refers to the possibility of someone to sue the owners of the corporate business. The corporate shareholders are thus held personally liable for the assets and liabilities of the business. Double taxation happens when the cooperate business is taxed for being a corporation itself and the second time when distributing dividends which are profits paid to shareholders in return of their investments. Question 4 I would prefer to start a partnership business for a small cafe/restraint business, where I would sell beverages and snacks. If managed well, a restaurant business can be very profitable as food is one of the basic needs of a human being implying that customers would always stream into the restaurant provided high quality services are provided. Restaurants do not need a lot of capital and expertise to start, all it needs is a spacious room with furniture, a well stocked kitchen, a couple of employees, cooks and waitresses. I prefer a partnership business with two partners where every partner has equal responsibilities to the business and is involved in the daily operations of the restaurant. Partnerships are relatively easy to start and compared to sole proprietors, the partners can raise a higher capital to start the business. Partners help each other in business decisions for instance interviewing employees or signing in a new contract. In connection to my restraint bu siness, my partner should have a hotel and catering skills to compliment my business skills. With a partnership, it is easier to get credit facilities because they have unlimited liability hence easier to raise sufficient funds to run the restaurant. Lastly, a partnership business is easy to dissolve as there not many legal restrictions. When the partners decide to go separate ways they just need to agree on how to split the assets and benefits after paying all the debts. Question 5 General liability- Here, the court will have to establish who has right to control the work and workers performing the duties. Parties Intentions- The intention of parties is also considered when differentiating an employee and a contractor. The court should check the agreement between the parties. Financial control- In determining a person’s status, financial issues are also important. The court should establish who pays the workers and where they get tools to perform their duties. Tax- If the wo rker is an independent employee, he is supposed to pay taxes from his/her pocket but if the worker is a contractor the hiring parties should pay his taxes. Working time- If the working time is longer than that of a usual contract, then the workers lean more towards the employee side than a contractor. Question 6 In legal terminologies," respondeat superior" means the employer is liable for the mistakes of their employee committed on the scope of work (Marsh &