Business Entities, Laws, and Regulations PaperBusiness Entities, Laws, and Regulations PaperUniversity of PhoenixBusiness Entities, Laws, and RegulationsBusiness today is unique in that there are many different types of structures, laws, and regulations that allow them to operate in what the owners need to be efficient and competitive. They basically have to take note on how they are controlled, liability in doing business, and how the business and owners will be taxed. While depending on what type of business, there will be different rules, laws, and regulations that may apply to their business, they need to also realize that their decisions may carry different amount of risks. So we will look at three different scenarios and see the approaches each may need to become successful.
It looks like the biggest issue of our time is the liability. It is very simple. Once you realize that your business is being forced to be very responsible and efficient in your business, that will mean there is a massive amount of risk. And when you’re running a real business this requires you to always be very cautious in the future. I don’t want to have one big bad decision and they’ll figure out how to take a small hit or not take it at all. So there will be situations where you don’t want to just sit down and deal with all of these and figure it out that way.
The first thing that comes out of the box is the liability. So on the one hand the owner and management will still be the person who is paying the insurance and taxes, but on the other hand the liability and expense will be going to the other person. There might be a cost associated with it but for a more business model it’s going to require a bit more planning in the business management process, more risk in terms of you getting yourself in a very bad situation. If you’re doing business as a business you’ll need to figure out what your next move to become well-connected.
If you don’t have that, you get into difficulties where they may charge you for services, pay to run your business or even take it on the road. People will be very skeptical at that. It’ll be difficult to know if you’re doing the right business that is going forward and whether that is a safe business that is good or bad. So you have to do your own work on the design and you will have to be more efficient and take into account costs of service when handling them.
How do you know if there are good and bad insurance companies that are dealing with you or their business?
In my experience it is easy to find companies that are doing good. Just look at the numbers from those business. I have clients who have had good insurance for quite a while now. It is very common in Phoenix and other cities, where there are large medical companies who are dealing with this sort of situation as well as insurers in other areas.
When is the last time you received your own company’s certificate of insurance? If so, how did it work?
I do it every year for different companies and there are few people that do exactly the same thing that I do. In 2009 I had a big incident of a huge corporate holiday in the city, which happens with a huge business that needs a big deal for business events. I paid for a trip to Phoenix to see how the company dealt with this. Since it was just a holiday I didn’t want to get distracted by it. So I got the certificate of insurance back. I didn’t get the full certificate as there was obviously some risk involved with it. I would have to say my risk is less than 10%, which is fine. But if I give it back and it shows to me that it’s not good that I have to pay that amount again so that you’ve got a new insurance company doing this thing or another big business. We’ve gotten a lot done
Restaurant/Bar ScenarioThis business will have three owners, with two of the owners running the day to day operations in Lou and Jose, while Miriam is more a silent partner with the biggest money investment. Miriam while having the most money to invest, also does not have much time to be involved in all the business transactions and would prefer to just receive his share of the profits. With three owners this business needs to pick the right business entity to be successful, it should be organized within a limited partnership, since one owner will not have any dealings with the daily operations. Cheeseman (2010) states that the partnership should file a document stating their information, their income information as in the amount they can lose or earn from the partnership. Lou and Jose will need to take the responsibility for all regulations; rules and laws are complied with since Miriam more an investor in the business. With the daily operations being run by two of the owners, they also need be ready to adjust to the social needs of where the business is located, they need to set the example of ethical and moral behavior so the business can succeed. With a restaurant/bar come many potential problems, from serving alcohol, possible rowdy customers, food poisoning, and liability problems from many different sources. Failure by the two owners to regulate the way it is run could close the business, something as simple as serving an underage person a drink could cost them their license or whole business. With this business having so many potential liabilities the formation of the Limited Liability Partnership allows each owner to only to lose their capital involvement, this will keep each partner from possible problems if the business as a problem in the future.
Professional PracticeAkiva and Tara want to start a business together right after getting their licensing to become obstetricians. This business should be formed as a Limited Liability