The discussion assignment consists of two parts Select one o

The discussion assignment consists of two parts. Select one of the questions for Part 1 and answer Part 2.

Discussion Question Part I

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 scholarly source from the SUO Library or one case that has been decided or is currently pending to support your answer.

Scenario 1 – Corporate Formation and Shareholder Liability

Ronald Powers, a well-known local entrepreneur, owned several businesses that filed for bankruptcy from 2010 to 2015. Last year, Powers established R. P. Properties, Inc. Powers is the sole shareholder and invested $2,500 in the company as a capital contribution. R.P. Properties, Inc. purchased 4 houses using a $600,000 loan obtained from the bank. Powers planned to fix up the homes a little and give renters a break on the rent if they agreed to do some repairs. R.P. Properties skipped several mortgage payments on the houses even though his tenants paid the rent. R.P. Properties is no longer able to pay its bills. As one of R.P. Properties\' creditors, you seek to hold Powers personally liable for the debts of the company.

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

Scenario 2 – Forms of Business Organizations

Nick and Mitch are partners in a successful lawn care business and are considering the possibilities of expansion. Mitch has been attending college to study accounting. Mitch would like to cut back on his landscaping responsibilities when he graduates to take on a full time job in accounting; however, he could manage the financial affairs of the partnership.

Nick suggests that they hire Tracy to join the partnership because he is younger and could pick up the work Mitch was doing. Nick and Mitch currently operate as a general partnership. When the partners talk with Tracy, he suggests that he would like to become a full partner.

How would you advise Nick and Mitch when they come to you for advice about the best type of business organization for their landscaping business? Explain your reasoning.

Consider at least one limited liability option in your response, such as the LLC or LLP.

Discussion Question Part II

Select any form of business organization (sole proprietorship, general partnership, LLP, LLC, CORPORATION, S Corporation) and create a business that sells at least one tangible product, such as books or food, or provides a service, such as pet grooming or daycare. 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–must be in your state

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.

Solution

Scenario 1 :

Yes, as a creditor, i can Hold Power\'s responsible for the default and debt and can begin the work to recovery. As it is a sole proprietor, i can hold Powers personally liable for any and all business-related obligations. Since his business defaulted on a loan, creditors can legally go after his personal possessions to the extent of his House and personal belongings.

2)

Victory Plumbers

It is a Plumbing service company. Being a Plumber my self, i know the demand and lack of supply for the Plumbing works and the HIGH charges it can get

Office would be in University Parks Drive, Waco , TX

I select this as a Sole proprietor, as it is the easiest way to start my business.

The advantages are that business can be started quickly and easily, very less restrictions and very few forms to fill out, i can control all of the money made by the business, I make all business operation calls, I am the management and, thus, can respond more quickly to day-to-day changes and decisions, less government control and taxation and don’t have to keep incorporation records and annual corporate records.

And the disadvantages are that i would have personal liability for my business debts and it appears less professional.

Legal requirements are that, i need to select a name, domain and get it registered with the state and also have to maintain business accounts and need to file tax with IRS for the business.