Business Law Entities Laws and Regulation

Business Law Entities Laws and Regulation

Gregory Salazar

Business Law/415

May 29, 2012

Janelle Keller

Business Law Entities Laws and Regulation

Restaurant Bar

Lou and Jose plan to open sports bar and restaurant, but are lacking money to start the business. Miriam wants to invest in the sports bar and restaurant and provide the money needed to fund the business. Miriam wants a percentage of the ownership with her investment to the business. For this business there are a total of three partners. Miriam will be the investor, Lou and Jose will run the day to day operations of the business. The business entity for the sports bar and restaurant will be a partnership. For operational purposes Lou and Jose are in a general partnership and Miriam will be a limited partner. With Miriam only an investor, she will not control any of the daily operations or activities.

In a general partnership partners have equal control and there are three requirements of a general partnership. First requirement is there must be an agreement entered orally or in writing by the persons who desire to form a partnership. Second the object of the agreement must be to share the profits of business carried on by the partnership. Third the business must be carried on by all the partners or by any of them acting for all of them. Each partner will pay individual taxes because of the taxation policy, also Lou, and Jose have unlimited liability because they are responsible for the daily operation of the sports bar and restaurant. With Miriam only being an investor she has limited liability and is has coverage to the amount she invested. However, all three partners must act in a lawful and ethical manner.

To start the business Lou and Jose have some requirements to meet the regulation when forming a partnership. All partners must complete a partnership agreement which includes the partners name, address, the capital contribution, the profit and loss ratio, and must...