Business Enities Law Paper
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- Date Submitted: 11/26/2010 06:48 PM
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Business Entities, Laws, and Regulations Paper
The two businesses are Extermination and Professional practice. In which organizational structure presents the best option for each business with contemplation for control, taxation, and liability issues. The laws, regulations, and risks any business must face. The construction scenario will include a discussion of a hypothetical situation in which a hiring manager must choose an applicant while considering laws, regulations, and the risks opposing which the business must support itself when making the decision.
Professional Practice
Akiva and Tara are newly license as obstetricians and want to open a birth clinic together. Both will need to take out a huge loan to finance their start-up amounts. Akiva and Tara would be best to create a limited liability partnership (LLP) to organize their business. By forming the LLP, the partners protect themselves from liability beyond their initial capital contribution should the partnership fail or face a lawsuit. Members of an LLP are also not personally liable for the malpractice of one partner and states require LLP to carry substantial liability insurance in exchange for this limited liability. The limited liability protects Akiva and Tara from being held personally liable for the loan they will take out should the business become insolvent (Cheeseman, 2010).
Forming an LLP ensures that Akiva and Tara retain control of their business because they are the only shareholders. For tax purposes, an LLP is not taxed as a separate entity so Akiva and Tara will only pay tax for the business profits on their individual tax returns. To form their LLP, Akiva and Tara will need to write and file articles of partnership in the state in which they wish to operate. If they choose to conduct business in another state, they will first need to register as a foreign LLP with that state. Organizing their business as a limited liability partnership offers Akiva and Tara the...
The two businesses are Extermination and Professional practice. In which organizational structure presents the best option for each business with contemplation for control, taxation, and liability issues. The laws, regulations, and risks any business must face. The construction scenario will include a discussion of a hypothetical situation in which a hiring manager must choose an applicant while considering laws, regulations, and the risks opposing which the business must support itself when making the decision.
Professional Practice
Akiva and Tara are newly license as obstetricians and want to open a birth clinic together. Both will need to take out a huge loan to finance their start-up amounts. Akiva and Tara would be best to create a limited liability partnership (LLP) to organize their business. By forming the LLP, the partners protect themselves from liability beyond their initial capital contribution should the partnership fail or face a lawsuit. Members of an LLP are also not personally liable for the malpractice of one partner and states require LLP to carry substantial liability insurance in exchange for this limited liability. The limited liability protects Akiva and Tara from being held personally liable for the loan they will take out should the business become insolvent (Cheeseman, 2010).
Forming an LLP ensures that Akiva and Tara retain control of their business because they are the only shareholders. For tax purposes, an LLP is not taxed as a separate entity so Akiva and Tara will only pay tax for the business profits on their individual tax returns. To form their LLP, Akiva and Tara will need to write and file articles of partnership in the state in which they wish to operate. If they choose to conduct business in another state, they will first need to register as a foreign LLP with that state. Organizing their business as a limited liability partnership offers Akiva and Tara the...