...AEM 3310 Introduction to Business Regulation Final KEY May 13, 2015 NAME: _______________________________________ Please write all answers on this sheet. If you run out of space please continue on the back, being certain to identify the question number with each answer. By completing this exam you are pledging to abide by the Cornell Code of Academic Integrity. DEFINITIONS (please be sure to note the class context of each term, e.g., communication regulation and identify the applicable regulations if relevant) (5 points each) 1. Accredited Investor Under the JOBS Act individuals meeting certain income/net worth requirements are permitted to invest specified portions in JOBS Act-related IPOs. 2. Warning Letter Correspondence from the FDA advising a firm of a violation of the Federal Food, Drug and Cosmetic Act detected during an inspection or investigation. 3. MSA Metropolitan Statistical Area – urban areas as defined by the Census office – often used to define local markets for antitrust enforcement 4. Blue Sky Laws State level laws which controlled the offering and sales of securities prior to federal regulation. SHORT ANSWER (10 POINTS EACH) 5. While most regulations we examined fit specifically into a single category like consumer products and food safety, environment, communications or financial, at least one crosses categories. Please identify one by name, specifying the two categories it intersects with. Consumer Financial...
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...Business Entities, Laws, and Regulation Danielle Carter BUS 415 March 19, 2012 Frank Poe Introduction For many companies to experience success, they should be able to come up with the experienced essential that will help them operate their businesses in the well-organized way as possible. Furthermore, there are ultimately three things that many companies need to pay attention of, for instance, taking control, liability and taxation issues. No business can ever be successful if they do not learn to stand by the rules or laws set that is exactly for their nature of business, and at the same time be understanding of the likely risks that are involved in their decisions. The construction company also needs to be aware of the laws governing employment and should also stand by them when beginning their business. Restaurant/Bar Scenario The investors of the restaurant/bar are Miriam along with Lou and Jose. Among the three, Miriam is known to be a wealthy investor and do not have time to participant in all the business transactions and would only choose to just receive his share from the percentage of ownership. Since this is the kind of business that is started by three owners, it should be created within a limited partnership. Cheeseman (2010) assertion is that the partnership should file a document stating their information return as well as their income information such as the amount they earn and lose from the partnership. Since Miriam is too busy, it is on the...
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...The start of this essay is to discuss the best business entry for each of the chosen scenario we choose for this assignment. We must identify laws, risks, and regulations of both scenarios we choose from. We are to discuss the elements and discuss the employment laws in which the business must comply in making a decision. In this Business Law paper, I will discuss two business scenarios’ business entity represents the best choice, while taking control, taxation, and liability issues into consideration. As well as, laws and regulations each business must consider in starting the business and any risks each business must consider to protect itself. Additionally, I will discuss a Construction scenario and a situation requiring a Hiring Manager to choose the best applicant while considering the above elements and employment laws and regulations which the business must consider when making a decision. In the construction scenario, Mel-lin is the hiring manager and needs to hire someone with a high school diploma is the only description for the job. Four peoples applied for the position at the Surebuild, Inc. ( Construction Company); Michelle has experience, high school diploma, was formerly employed as a jackhammer operator and is pregnant, Eric has no experience and no high school diploma; Felipe speak no English, no high school diploma, but is experienced in jackhammer; Nick has epileptic, has a college degree, and no experience with a jackhammer. All four...
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...they must take into consideration taking control, taxation, and liability issues when starting their business. Each company will have to make decisions as it deals with employment laws and regulations, as well as identifying risk that may arise while they begin to conduct business. Restaurant/Bar Scenario Lou and Jose plan on opening a sports bar and restaurant with help from Miriam. The pair, Lou and Jose, has little start up money and Miriam is willing to invest into their business. Miriam will provide the capital needed in order for them to start their business. Miriam is exchanging his/her investment for partial ownership into the business based upon a percentage. The three of them combined will form a general partnership with all three of them owning the business. Lou and Jose would be the managing partners while Miriam is considered an investing partner since he/she wants to invest without doing much else when it comes to the day to day business at the bar/restaurant. Miriam will allow Lou and Jose to control the business and they all share the businesses profits. This type of general partnership can be determined if the group meets the criteria which has been broken down into four categories. The four categories are; 1. It must be an association of two or more people. 2. These people must be carrying on a business. 3. They must be co-owners. 4. The business must be for profit. Lou, Jose, and Miriam are co-owners of a bar/restaurant for profit, which makes...
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...Environmental Regulation on Small Businesses Small businesses are critical to the U.S. economy. They create about one-half of all private sector jobs and generate more than half of all revenues. It is critical to take into consideration how regulations and litigation impact small businesses. The biggest impact consideration is the financial impact to a companies’ bottom line (RAND Corporation). The U.S. economy slowly coming out of a recession, small businesses are struggling to overcome imposing environmental regulations from Washington. With record low rates of small business startups, people would argue that these imposing regulations are turning out all positive results. Small businesses unlike their larger business counterparts, cannot afford to hire specialty firms to help them make their way through these regulations. It also takes a lot of time and money to keep up with all the rules imposed on them. Such regulations impose costs on small businesses ranging from capital investments in upgrading current working environments to civil or criminal penalties. An effect of these regulations would be lower hiring projections for the near future. Other effects could be that the U.S. will not see a significant change in the unemployment rates and small businesses will lose out on revenues generated by hiring more employees (Alford). The definition of a small business is one that employs 500 employees or less. The Small Business Act (SBA) defines a small business as “One...
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...Business Entities, Laws and Regulations Mario Zapata April 28, 2011 BUS/415 University of Phoenix Michael John Abstract A partnership of entrepreneurs is planning in open a new sport restaurant bar, with big screen television, but the entrepreneurs do not have enough capital to complete the project. A wealthy investor is willing to participate in the business plan, but wants a percentage of the company. In this paper Mario Zapata examines the process of completed the new sport’s restaurant. In this scenario, Lou and Jose are planning to open a sports bar and restaurant. Because they do not have enough money, Miriam a wealthy investor has agreed to provide capital to help fund the business. In return, Miriam will receive a sufficient percentage of profit in the ownership. Business Entity, Control, Taxation and Liability The entity for this business organization, a sports restaurant and bar, would be to start up as a partnership firm. All three would receive equal percentage to the business. Miriam would provide the capital while Lou and Jose will take care of the day to day operations of this organization. In a partnership, the control is up to all three of the partners. The decisions are based on the mutual understanding of all three and should have a written agreement. Lou and Jose would hold control of the business activities while Miriam is only investing to earn a profit (Liability for partnership debts, 2010). After the profit is split among...
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...and restaurant business. They need an investor, so that’s when Miriam came into the picture. She will just be a silent partner and will get a percentage of the profits. When having two or more business partners, they can form a LLLP. Limited Liability Limited Partnership (LLLP) is ”a special type of limited partnership that has both general partners and limited partners, where both the general and limited partners have limited liability and are not personally liable for the debts of the LLLP.” (Cheeseman, 2010) This is also a form of a general partnership. For example if I go into a business with one or more partners to make a profit on whatever the business it is. That will be a general partnership. Miriam wants to get in on the business, but don’t have the time to put in at the bar. She would be in a limited partnership. Limited partnership comes in two types, general partners and limited partners. Miriam would fall under the limited partners because Miriam doesn’t have the time to deal with the business aspect of the sports bar and restaurant. It also states that limited partners are “partners in a limited partnership who invest capital but do not participate in management and are not personally liable for partnership debts beyond their capital contributions.” (Cheeseman, 2010) Taking control of a business takes a few different steps and with those steps is called a formation of a general partnership. In the formation of a general partnership the business has to “meet...
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...Business Entities, Laws, and Regulations Paper When an individual or group of individuals decided to open a business there are many choices that will need to be made about what type of business they will want to work toward. First an entity for the company will need to be chosen. This entity will help decide how each individual will be held responsible for the business as well as liability issues and taxation procedures. Control of the business will also be a factor when choosing a particular entity. We will be focusing on two different scenarios and need to decide what type of entity the company needs to choose. Liability as well as rules and regulations will need to be taken into account so that the business will not only profit but will be safe from many risks that can occur when operating a business. The last scenario will discuss what rules and laws a company must abide by when hiring individuals. We will take in to account that this is a new construction company that will be looking for a certain individual to hire for the new position. Restaurant/Bar Scenario In this scenario we have two individuals, Lou and Jose that want to open a sports bar complete with large TV’s to entice customers to come in a watch many sporting events. The bar would serve alcohol and would offer food to their customers. They however do not have much money so another individual Miriam has agreed to invest money into the company for a part of the ownership, but does not want to have...
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...Business Entities, Laws, and Regulations BUS-415 11/13/11 Lester Bovia Business Entities, Laws, and Regulations Scenario #1 Restaurant Bar: Lou and Jose plan to open a sports bar and restaurant where customers socialize and watch sporting events on large-screen TVs that hang around the bar. They do not have much money, but they have Miriam, a wealthy investor who does not have time to participate in the business, but wants to provide capital to start the business in return for a percentage of ownership. Three people, Lou, Jose, and Miriam want to go into business together. They plan to open a sports bar/restaurant. The facility will offer a place for people to socialize, eat, drink, and watch sports. Lou and Jose have the skills to open and run such an adventure, but have little capital. However, Miriam is wealthy and willing to fund the project for a percentage of ownership. In this scenario, the group must decide the best business entity taking into consideration control, taxation and liability issues. This business venture is small in nature but has high liability risk. People, alcohol, and sports mixed together can be volatile; therefore the business owners should consider a partnership that limits their own personal liability. A limited liability company combines the most favorable attributes of general partnerships, limited partnerships, and corporations (Cheeseman, 2010). The formation of an LLC requires the company to include LLC (in some form or fashion)...
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...Business Entities, Laws, and Regulations Paper David Bell BUS 415 March 12, 2012 Eric Nord Business Entities, Laws, and Regulations Paper Starting a business is not an easy task, regardless of what type of business that is being started. It would be foolish to be naive of the amount of work that has to be put into create a successful business. To step into the business world on the right foot, it is imperative to create a well designed business plan. This business plan must cover all areas including the companies plan to protect against lawsuits. The law can affect a company just as much as it can affect each member of the company. With a well designed business plan, the company will be better able to prevent legal situations. Restaurant/Bar For Lou and Jose, opening a sports will be no easy task. They do not have the money themselves, but fortunately have the services of Miriam. Miriam is a wealthy investor who does not have time to become active in the company but is a willing investor. The type of business that best fits their sports bar would be a partnership. “A partnership is the relationship existing between two or more persons who join to carry on a trade or business. Each person contributes money, property, labor or skill, and expects to share in the profits and losses of the business (" Partnerships," 2012). Lou, Jose, and Miriam make up the partnership, but Lou and Jose will have control of the direction of the business. Miriam is just apart of the business...
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...Business Entities, Laws and Regulations Paper The following paper will discuss two hypothetical businesses and the organizational structure that presents the best choice for each business with consideration for control, taxation, and liability issues. It will address the laws, regulations and risks each business must face. The paper will also include a discussion of a hypothetical situation in which a hiring manager must choose an applicant while considering laws, regulations, and the risks against which the business must protect itself when making the decision. Professional Practice Akiva and Tara are newly licensed as obstetricians and want to open a birth clinic together. They will need to take out a large loan to finance their start-up costs. Akiva and Tara would be best served by creating a limited liability partnership (LLP) to organize their business. By forming the LLP, the partners protect themselves from liability beyond their initial capital contribution should the partnership fail or face a lawsuit (Cheeseman, 2010). Members of an LLP are also not personally liable for the malpractice of one partner, and states require LLPs to carry substantial liability insurance in exchange for this limited liability. The limited liability protects Akiva and Tara from being held personally liable for the loan they will take out should the business become insolvent. Forming an LLP ensures that Akiva and Tara retain control of their business because they are the only shareholders...
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...Business Entities, Laws, and Regulations Paper LAW/421 Business Entities, Laws, and Regulations Paper According to Melvin (2011) all business ventures operates as a legalized form of business entity. When owners and managers of a business have knowledge of the structure, advantages and risk that each form of business entity involved then business for this particular group, will more effective at concentrating on business opportunities and taking advantage of them while limiting potential liability. These paper will giving examples of three different scenarios where owner have specific plans for each business and of these examples the fallowing step will be touch: a) the business entity that represents the best choice for each business, taking control, taxation, and liability issues into consideration; (b) identify laws and regulations each particular business must consider in starting the business; and (c) identify risks against which each particular business must protect itself. Restaurant/Bar Business Scenario Restaurant/bar business: Lou and Jose plan to open a sports bar and restaurant where customers socialize and watch sporting events on large-screen TVs that hang around the bar. They do not have much money, but they do have Miriam, a wealthy investor who does not have time to participate actively in the business, but wants to provide capital to start the business in return for a percentage ownership. According to Melvin (2011) Limited Liability Partnership...
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...Business Entities, Laws, and Regulations Paper University Of Phoenix Business Entities, Laws, and Regulations Paper Successful management of a business entity is dependent on understanding industry structure, taxation, laws, regulations, risks, motivation, and a business plan. The business structure will affect profits, business liability, and taxes. A sole proprietorship, an LLC, or corporation, requires research and planning to determine which structure is right for a business. Equally important is development of a good business plan. The business plan will provide industry insight to important aspects of a business. Understanding local, state, and federal business laws and regulations will assist in identifying risks and provide information to protect or minimize the outcome of litigation or failure. Lou and Jose are planning to open a sports bar and restaurant but they lack the startup cash to do so. A wealthy investor named Miriam, has agreed to provide working capital to fund the startup and establishment of the business. In return for investing her money into the business, she wants a percentage of the company. The structure that is appropriate for the business is a member-managed LLC with Lou and Jose as the designated manager and Miriam as the non-manager. Lou and Jose will manage day-to-day business, whereas, Miriam has no control, unless otherwise provided in the operating agreement (Cheeseman, 2010). An LLC (limited Liability Company) is a tax chameleon, which...
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...Business Entities, Laws, and Regulations Business Entities, Laws, and Regulations Regardless of the type of business to be opened, an entrepreneur should have a sound business plan, patience, motivation, and time. It takes knowledge of current laws and understanding of regulations that protect new business owners and their counterparts alike. Some employment laws vary state-to-state and some are federally regulated; however, it is up to a new business owner to not only learn these laws but to familiarize themselves with them to ensure compliance. Restaurant/Bar “Lou and Jose plan to open a sports bar and restaurant but they do not have much money. Miriam is a wealthy investor who does not have time to work the business; however, she wants to provide funds for the start-up of the business. In return, Miriam wants a percentage of ownership” (University of Phoenix, 2010). Business Entity A limited liability partnership is the best choice of business entity for Lou, Jose, and Miriam. Jose and Lou will control and manage the business while Miriam is the investing partner and will act as a limited partner. According to the IRS, “a partnership is the relationship existing between two or more persons who join to carry on a trade or business. Each person contributes money, property, labor or skill, and expects to share in the profits and losses of the business” (IRS, 2012). Control. A written partnership agreement is not required by law; however, it is a way for partners to...
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...Unit 3 Research Paper # 1 Business Law Outline Thesis--Government Regulation is needed in the U.S. to keep scandals from ruining our businesses livelihood and the financial futures of all Americans. Introduction Many acts have been created because of controversy and scandals that have and continue to happen in the U.S. These acts were introduced to prevent individuals and businesses from losing everything and to help the government to keep individuals and businesses safe from scams. Without these regulations there would be no standards and companies and corporations could do as they please. They also help to monitor the accounting of companies, keep the scandals at a minimum, and watch for trends so we don’t have another stock market crash. Too many people have lost everything when these types of disasters strike. Securities Acts of 1933 and 1934 The Securities Act of 1933 was enacted as a result of the stock market crash of 1929. It was the first major piece of federal legislation to apply to the sale of securities. The legislation was enacted as the need for more information within and about the securities markets was acknowledged. The 1933 Act was based on the idea that companies offering securities should provide potential investors with sufficient information about both the issuer and the securities to make an informed investment decision. The Securities Act of 1934 established the Securities and Exchange Commission (SEC). The 1934 Act also gives...
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