Business Entities Laws and Regulations

Business Entities Laws and Regulations

In this paper we will be looking at two businesses a professional practice and an extermination company. We will then be deciding which organizational structure best fits each business while keeping in mind liability issues, taxation, regulations, control, and any risk the businesses must take. We will then focus upon a construction scenario and follow along side a hiring manager. We observe the process this individual will have to go through while they must select a qualified applicant for their company. This manager will be taking into consideration all of the regulations, laws, and risks to their own company when formulating the decision.

Tara and Akiva are newly licensed obstetricians and have decided that they want to open a clinic as partners. The first step they will need to undertake is securing a large loan amount in order to finance their start up costs. The next step would be for Tara and Akiva to create a limited liability partnership or (LLP) so they can better organize their business structure. With the formation of an LLP, the two partners can now better protect themselves against any liability that would fall beyond their own initial investment into the company, for example the two partners should face a lawsuit. Since the two partners are forming an LLP this would also protect one or the other from a malpractice suit. In addition many states request that any LLP should carry liability insurance in an exchange for this limited liability. With the limited liability Tara and Akiva are protected from both being found personally responsible for the initial loan they will withdraw should the business then become insolvent (Cheeseman, 2010).

A wealthy investor by the name of Frank has the opportunity to spring up a chain of extermination businesses across the United States. The first step Frank needs to consider is to

Business Entities Laws and Regulations

organize his business into a franchise....