Identify and explain the advantages and disadvantages to using varied available business forms.

After completion of this and the fourth module, student should be able to:
Identify and explain the advantages and disadvantages to using varied available business forms.
Demonstrate familiarity with the laws governing business formation.
Explain distinctions between hybrid business forms that maintain the strengths of doing business as a partnership and a corporation.
Recognize the taxation disadvantages within the corporate form.
Assignment
Read Chapters 38-40 in your text.
Review Powerpoints for Chapters 38, 39 and 40 posted in the Module.
Take the quizzes for Chapter 38 , Chapter 39 & Chapter 40 .
Review the short videos linked after these instructions.
YouTube Video – Business Forms 1
(Links to an external site.)
,
Youtube Video – Business Forms 2 – Sole Proprietorship
(Links to an external site.)
,
Youtube Video – Business Forms 3 – Corporate Structure
(Links to an external site.)
,
YouTube Video – Business Forms 4
(Links to an external site.)
, and
Youtube Vidoe – Business Forms 5 – LLC Protection
(Links to an external site.)
. Keep these in mind as you will have an option to prepare a business as your Research/Writing Project.
If your name is listed here, post an internet link to the Module 5 Topic on the message board that explains the concept assigned to you as it relates to the text materials –

Consolidation Twinkal Patel this my name

6. Complete the assigned problems in the Module 5 Assignment –
7. On the Business Formation Topic on the message board, respond to the following prompt – “If you had to form your own business, state which form you would least like to use and explain why.” Review the other responses posted and think about whether something that someone else has said has changed your mind.

If your last name begins with the letters ‘A’ through ‘M,’ complete questions 1, 3 & 5.
If your last name begins with the letters ‘N’ through ‘Z,’ complete questions 2, 4 & 6.
Shareholder Resolution The Medical Committee for Human Rights ( Committee), a nonprofit corporation organized to advance concerns for human life, received a gift of shares of Dow Chemical ( Dow) stock. Dow manufactured napalm, a chemical defoliant that was used during the Vietnam Conflict. Committee objected to the sale of napalm by Dow primarily because of its concerns for human life. Committee owned sufficient shares for a long enough time to propose a shareholders’ resolution, as long as it met the other requirements to propose such a resolution. Committee proposed that the following resolution be included in the proxy materials circulated by management for the annual shareholders’ meeting: RESOLVED, that the shareholders of the Dow Chemical company request that the Board of Directors, in accordance with the law, consider the advisability of adopting a resolution setting forth an amendment to the composite certificate of incorporation of the Dow Chemical Company that the company shall not make napalm. Dow’s management refused to include the requested resolution in its proxy materials. Committee sued, alleging that its resolution met the requirements to be included in the proxy materials. Who wins? Medical Committee for Human Rights v. Securities and Ex-change Commission, 139 U. S. App. D. C. 226, 432 F. 2d 659, Web 1970 U. S. App. Lexis 8284 ( United States Court of Appeals for the District of Columbia Circuit)
Merger The board of directors of Plant Indus-tries, Inc. ( Plant), under the guidance of Robert B. Bregman, the chief executive officer of the corporation, embarked on a course of action that resulted in the sale of several unprofitable subsidiaries. Bregman then engaged in a course of action to sell Plant National ( Quebec) Ltd., a subsidiary that constituted Plant’s entire Canadian operations. This was a profitable subsidiary that comprised more than 50 percent of Plant’s assets, sales, and profits. Do Plant’s shareholders have to be ac-corded voting and appraisal rights regarding the sale of this subsidiary? Katz v. Bregman, 431 A. 2d 1274, Web 1981 Del. Ch. Lexis 449 ( Court of Chancery of Delaware)
Limited Liability Dale C. Bone was a member of Roscoe, LLC, an LLC organized under the laws of North Carolina. Roscoe, LLC, purchased two acres of land near the town of Apex, North Carolina. Apex approved Roscoe, LLC’s plan to construct and operate a propane gas bulk storage and distribution facility on the land. This use was permitted under Apex’s zoning ordinance. Daylene Page and other homeowners in the area sued Roscoe, LLC, and Dale C. Bone, alleging that the gas storage facility, if constructed, would constitute a nuisance. After the trial court denied the plaintiffs’ motion to obtain a preliminary injunction against construction of the facility, the plaintiffs dismissed the law-suit. Subsequently, Bone sued the plaintiffs to recover the attorneys’ fees he had spent in defending against the plaintiffs’ lawsuit. Bone alleged that he should have not been named a defendant in the lawsuit because he was a member of Roscoe, LLC, and would have had no personal liability in the lawsuit. Should the plaintiffs who sued Bone be required to pay his legal fees in fighting the lawsuit? Why or why not? Page v. Roscoe, LLC, 128 N. C. App. 678, 497 S. E. 2d 422, Web 1998 N. C. App. Lexis 169 ( Court of Appeals of North Carolina)
Liability of Members Harold, Jasmine, Caesar, and Yuan form Microhard. com, LLC, a limited liability company, to sell computer hardware and software over the Internet. Microhard. com, LLC, hires Heather, a re-cent graduate of the University of Chicago and a brilliant software designer, as an employee. Heather’s job is to design and develop software that will execute a computer command when the computer user thinks of the next command he or she wants to execute on the computer. Using Heather’s research, Microhard. com, LLC, develops the Third Eye software program that does this. Microhard. com, LLC, sends Heather to the annual Comdex computer show in Las Vegas, Nevada, to unveil this revolutionary software. Heather goes to Las Vegas, and while there, she rents an automobile to get from the hotel to the computer show and to meet interested buyers at different locations in Las Vegas. While Heather is driving from her hotel to the site of the Comdex computer show, she negligently causes an accident in which she runs over Harold Singer, a pedestrian. Singer, who suffers severe physical injuries, sues Microhard. com, LLC, Heather, Harold, Jasmine, Caesar, and Yuan to recover monetary damages for his injuries. Who is liable?
H& R Block, Inc. ( Block), is a franchisor that licenses franchisees to provide tax preparation services to customers under the H& R Block service mark. June McCart was granted a Block franchise at 900 Main Street, Rochester, New York. For seven years, her husband, Robert, was involved in the operation of a Block franchise in Rensselaer, New York. After that, he assisted June in the operation of her Block franchise. All the McCarts’ income during the time in question came from the Block franchises. The Block franchise agreement that June signed con-tained a provision whereby she agreed not to compete ( 1) in the business of tax preparation ( 2) within 250 miles of the franchise ( 3) for a period of two years after the termination of the franchise. Robert did not sign the Rochester franchise agreement. Two years later, June wrote a letter to Block, giving notice that she was terminating the franchise. Shortly thereafter, the McCarts sent a letter to people who had been clients of the Rochester Block office, informing them that June was leaving Block and that Robert was opening a tax preparation service in which June would assist him. Block granted a new franchise in Rochester to another franchisee. It sued the McCarts to enforce the covenant not to compete against them. Who wins? McCart v. H& R Block, Inc., 470 N. E. 2d 756, Web 1984 Ind. App. Lexis 3039 ( Court of Appeals of Indiana)
Termination of a Franchise Kawasaki Mo-tors Corporation ( Kawasaki), a Japanese corporation, manufactures motorcycles that it distributes in the United States through its subsidiary, Kawasaki Motors Corporation, U. S. A. ( Kawasaki USA). Kawasaki USA is a franchisor that grants franchises to dealerships to sell Kawasaki motorcycles. Kawasaki USA granted the Kawasaki Shop of Aurora, Inc. ( Dealer), a franchise to sell Kawasaki motorcycles in Aurora, Illinois. The franchise changed locations twice. Both moves were within the five- mile exclusive territory granted Dealer in the franchise agreement. Dealer did not obtain Kawasaki USA’s written approval for either move, as required by the franchise agreement. Kawasaki USA acquiesced to the first move but not the second. At the second new location, Dealer also operated Honda and Suzuki motorcycle franchises and was negotiating to operate a Yamaha franchise. The Kawasaki franchise agreement expressly permitted multiline dealerships. Kawasaki USA objected to the second move, asserting that Dealer had not received written approval for the move, as required by the franchise agreement. Evidence showed, however, that the real reason Kawasaki objected to the move was because it did not want its motorcycles to be sold at the same location as other manufacturers’ motorcycles. Kawasaki terminated Dealer’s franchise. Dealer sued Kawasaki USA for wrongful termination. Who wins? Kawasaki Shop of Aurora, Inc. v. Kawasaki Motors Corporation, U. S. A., 188 Ill. App. 3d 664, 544 N. E. 2d 457, Web 1989 Ill. App. Lexis 1442 ( Appellate Court of Illinois)

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