Week Five Assignment

This typesetters case of entity lead picture the control of a resole proprietorship while placing financial obligation on the strain rather than the individual. Fireworks submit the potential to be dangerous, causing serious damage to deuce people ND shoes. The potential for li qualification associated with the use and/or patch up of fireworks is unavoidable. any(prenominal) unrivaled of the following deserts may subject the man effectuate to li susceptibility for injuries that ar occasiond by their growth design dishonor, manufacturing defect and defect in marketing, (McLaughlin, & Laurite, 2014).Liabilities associated with these defects accept well-educated torts, negligence and nonindulgent indebtedness. The first stones throw to avoiding an attack on in the flesh(predicate) assets is relocating trading operations to an atomic number 18a zoned for the be of fireworks. No national what the entity, the manufacture of explosives in a residential ara orda in enable a liability protection to be pierced. An wise to(p) tort give occur when the manufacturer sells a merchandise that he knows is imperfect or dangerous of which injuries argon re presumable to occur. In such cases, heyday has a duty to warn the consumer of potential harm.If crest take aparts to leave alone warnings or rec everys on its products, it dissolve be held conjectural for battery to anyone injure by its products. According to a 1903 product liability case, a company is liable for failing to nonify the buyer that the product is potenti ally dangerous, is effective, or negligence in the manufacture or sale of a dangerous product. See House v. J. I. character Threshing Mach. Co. , 120 F. 865 (8th Cirri. 1903). Should a contingency occur during the manufacture, sale or re phallusing a sole proprietor will be liable for any and all property damage incurred to twain himself and/or his neighbors.With a sole proprietorship on that point is no court- come outed distinction amongst the possessor and the headache thus, he is at peril of losing private assets in a lawsuit against the chore. Should injury, death, or damage to property occur from well-readly manufacturing or interchange a ungenerous product, both the manufacturer and suppliers hindquartersnister be sued for unintentional injuries. This happen ext dismisss beyond the manufacture and supply of the fireworks it ilkwise includes cargon in design and use. For instance, should a consumer purchase defective coer Fireworks from a retailer and sustain injury to him and others, face lift can be sued.See Boeing Airplane Co. V. Brown, 291 F. Ad 310 (9th Cirri. 1961). Strict liability in tort arises when someone suffers an injury non from anyones voluntary negligent act, only rather by engaging in some as such dangerous activity or, beneath real resistances, through the manufacturing of unsafe products, (Rogers, S. 2012). Courts today, rationalize strict lia bility by establishing the fact that manufacturers argon better positioned to prevent pretend of firing than, that Of the consumer. As such, it is the responsibility of the manufacturer to contain their products be safe.In send to be strictly liable for a product, the plaintiff moldiness demonstrate that there is a defect, the defect was ca apply by the manufacturer and in turn, was the cause of injury. See Kerr v. Corning Glass, 169 N. W.. Ad 587 (Min. 1969). In pronounce to determine Contract Viability, it s cardinal to review the commensuratenesss between apex and the retailers. seek each contract carefully ensuring it contains fivesome essential elements. The legitimacy of the agreements is dependant upon it containing an offer, acceptance, favor legality and capacity.To further explain, an offer is an invitation to scratch into a contract. If a company agrees to the footing outlined in the offer, they have accordingly accepted the agreement. Once an agreement h as been recognized, it moldiness be established that both parties have intentions to enter into a legal cover version contract. The tump overations of his agreement are legal exchanges for go or products. For altitude Fireworks, this will include the prices paid for the fireworks and the amounts desired. In order to be legally binding, the cost of doing business moldiness(prenominal) not be ill-gotten and, the ability to perform must not be impossible.Finally, it must be determined that both parties have entered into the contract large-mindedly without compulsion or duress. Additionally, the law prohibits contracts made with persons of lessened mental capacity and minors. The contract luck c erstwhilerns itself with the deed specifications and acquirement of the agreement. Though the agreement appears to be viable, if it lacks a specific mathematical process strategy, it will not have a future. The probability Of the agreement to remain in force will be dependent upon the period of performance and quantities desired during that period.Fireworks are seasonal whereby a retailer agreeing to order large quantities on a unbendable flat coat is not realistic. There is no guarantee the quantities will remain logical throughout the contract period. Additionally, extremum is interested about failing to meet its contractual obligations should it not hire enough people. The introductory questions that need to be addressed are how and when to order, amounts to order and what happens if height fails to deliver? The proprietor is concerned that there will not be enough work for the extra employees once the initial orders have been filled.The term and conditions of the contract will determine the type of employees ACME will hire. At-will employment adds no obligation of continuous employment once the orders have been filled. For this reason, the law allows an employer to terminate without precisely cause or reason. Generally, this rule is apply for seas onal work. ACME Fireworks has several options to weigh in meeting contract demands, performance and productivity. By hiring temporary full-time associates, ACME can readily meet demands thus far there is no incentive to curb a standard of quality or productivity.Same is true for part-time associates as their hours are unremarkably dictated by the necessarily or demands Of a business. Consideration for everyday and day dig out employees might prove useful. Casual employees typically work on an as needed basis and usually consist of single parents, college students or applicants want extra money. Temp Agencies provide labor on a daily, weekly or monthly basis. Typically, temp agency employees that surpass are offered permanent positions within an placement. Hiring steadfast employees on a probationary basis will allow ACME the ability to meet the quality, performance and productivity of the contract.Generally a yet-cause type of employment this employee is evaluated at th e end of a stipulate period ground upon certain criteria. If an employee fails to meet standards then they are usually let go. With the increase in business size and operation certain liabilities can raise concern. It is in-chief(postnominal) to empathize the differences associated with the different entities when choosing what best fits your organization. Whether choosing a mend Proprietorship, a Partnership, a Corporation or a trammel Liability Company, it is important to assess all the risks associated with the nature of the business.Currently, ACME Fireworks operates out of a service department and the owner enjoys complete autonomy over operations. operating(a) as a Sole Proprietorship, the business and the owner remain one and the same. This provides the highest risk of loss to personal assets. The disadvantage is that a sole proprietor has especial(a) options for raising capital and no limits on liability for business debts thus if the business does not fare well, the sole proprietor can face personal bankruptcy, (Rogers, S. 2012).As a partnership, ACME Fireworks will percent ownership with two or more people. Partners are automatically owners and managers of the business, and the law presumes equal rights unless the partners have specified otherwise, (Rogers, S. 2012). In a partnership, taxes are assessed on the pay of the partners and not that of the business. Should the company have political party too lawsuit or is ineffective to fulfill its contractual obligations, the personal assets of all the partners can be used to satisfy a judgment by the court. Partners are not only liable for their own actions, but similarly for the business debts and decisions made by other partners. In addition, the personal assets of all partners can be used to satisfy the partnerships debt, (SABA. Gob, 2014). Should ACME Fireworks meditate a Corporation, it will conk an self-governing legal entity. The owner(s) will then become shareholders which will limit their liability and legal responsibility. In order to remain free of any personal liability, the company must operate according to postulate company laws. If the corporate form of business organization is used to defraud creditors, stockholders will stick out the protection of limited liability and will be held personally liable for all debts of the alliance, (Rogers, S. 2012). Since a corporation requires the filing of entangled forms, annual reports and fees, it can prove dear(p) for a small company. Additionally, a corporation is double taxed whereby the company pays taxes on its earnings and the shareholders pays taxes on dividends paid UT. A Limited Liability Company (LLC) provides the limited liability features of a Corporation but operates bid a partnership or sole proprietorship.A LLC typically features easier formation (although filing under the statute is required) and lower filing fees, flow-through receipts where members of a LLC are taxed on their earning s, but the business itself is not taxed, the stability of a corporation (a members leaving will not dissolve the LLC), and limited liability, where the business is liable for its debts and the people who own it are not, (Rogers, S. 2012). Since ACME Fireworks is a small business with a single owner, a LLC will provide a low cost pick that provides limited protection of personal assets.Unlike like a corporation, the taxes, profits and losses are passed through to each member of the LLC. Members are protected from personal liability for the actions and decisions Of the LLC. However, in the case of wrongful or illegal acts, the limited liability can be pierced and personal assets can be assessed. Additionally, it is important to separate business monetary resource from personal funds. Should ACME use a personal ann. account to pay its creditors, they can in turn pierce the limited liability and seize the owners personal funds. The national Government does not recognize a LLC as a se parate entity as in a corporation.As such, the owner(s) of ACME Fireworks will file their shared earnings on their personal income tax. If the LLC is a single owner operation, income will be reported on a Schedule C just like that of a sole proprietorship. Should there be more than one member sharing in the profits and losses, a form 1 065 will be filed as is done in a Partnership. The entire net income of the LLC must be accounted or in the filings of all members involved. The owner of ACME Fireworks has asked for advices in choosing an entity that would provide the least(prenominal) risk to personal assets, should he fail to meet his contractual obligations.It is important for ACME Fireworks to understand the risks associated with the nature of the business. In assessing the period operation, ACME Fireworks operates out of a garage and currently employs approximately 15 people. The liabilities associated with the manufacture of dangerous materials poses a high risk to personal a ssets should a mishap occur. in front engaging rather, ACME must consider relocating to meet both local and state zoning laws. Additionally, Federal OSHA standards must be in place in order to release the owner of allegations associated with safety, wrong doing, or negligence.The law provides certain protections associated with Alls and Corporations. As a sole-proprietor, ACME Fireworks and the owner are one in the same. Should the company fail in its obligations or fail to warn and/or injure a consumer, the owner is held personally liable. If ACME is to pursue a partnership, the partners share in the personal liabilities of the company. For he return of what is considered dangerous materials (fireworks), the risks associated with injuries from product liability to manufacture are substantial.The company IS liable for intentional torts, negligence and strict liability as such neither a sole-proprietorship nor partnership is suggested. As a manager of ACME Fireworks, would recommen d the company pursue a Limited Liability Corporation. According to the delicate Business Administration, Members are protected from personal liability for business decisions or actions of the LLC, (SABA. Gob, 2014). Essentially, if the LLC becomes party to a suit or is unable to fulfill its obligations, members enjoy the same protections as that of shareholders in a corporation.However, as a limited liability company, they are not exempt from litigation involving wrongful acts by its members or employees. In a LLC, the owner will retain control over the company as in a sole-proprietorship and lessens the risk of personal liability. The owner is also concerned with ACMEs ability to meet either contractual obligations or make payroll. The LLC would provide the protections it needs without relinquishing control to a Board of Directors, as in a corporation. Without knowing the specific terms and conditions of the agreements, it is tight to ascertain viability and validity.