Explain why Acme Fireworks should not operate as a sole proprietorship.

You are the manager of Acme Fireworks, a fireworks retailer who sells
fireworks, puts on ground display fireworks, and large aerial display
fireworks. The company started in the owner’s garage two years ago and
now has 15 employees that you manage. The company started as a sole
proprietorship, and the owner has never changed the entity. The owner
has informed you that the company has received inquiries from several
large businesses wondering if the company could create several fireworks
displays on a regular basis. The owner told the inquirers that the
company could fill such display orders, and a price per display was
agreed upon. It was discussed that most of the cost for a fireworks
display is for skilled labor, insurance, and the actual service of
setting off the fireworks. No other details were discussed. The owner is
anticipating that new employees will need to be hired, but he is
worried that if the large orders for fireworks displays do not continue,
the company will not have the funds to pay the new employees. The owner
is now considering changing the business entity, but he does not know
what entity to form or how to form it.
The owner has asked you to do the following:
Determine if the contracts with the businesses will be governed by
common law or the Uniform Commercial Code (UCC), and explain why.
Analyze whether the owner formed a contract with the businesses, and
apply the five essential elements of an enforceable contract.
Explain the potential personal liability to Acme Fireworks if a
spectator is injured by a stray firework from a fireworks display.
Discuss the different employment types and relationships relevant to
agency law, and analyze the advantages and disadvantages of each type
specific to Acme Fireworks.
Explain why Acme Fireworks should not operate as a sole
proprietorship.

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