BUS 307: Case Study 1
Southern New Hampshire University
To: Fred and Sally
From:
Date: November 13, 2022
Subject: "Fred's Miracle Cough Syrup
Thank you for meeting me to discuss the legal aspect of beginning your new medicinal
business venture. After review of the subjects and concerns that you have brough to me, I've
collected enough information to have a drafted "gameplan" for the business which includes the
following topics:
: Business Types
- Management Issues
: Product Liability Issues
- Personal and Business Estate Planning
Each of these topics have heavy legal impacts on your family when starting out a business and
it's imperative that we make sure they are all addressed
Business Entities
Four main business types are used across the nation: sole proprietorships, partnerships.
corporations, and limited liability companies. Each form of business organization is useful for
different types of businesses and is highly reliant on the plans of the business owner. For a sole
proprietorship, there are less legal hoops to jump through to get thing started. This type of
business form is best leveraged when there is one owner that oversees the entire operation
Responsibilities include determining business hours, hiring employees, and complete control in
the management of the organization. For tax purposes, all profits are taxed as personal income of
the business owner. Though there are some great benefits with choosing a sole proprietorship
some disadvantages may turn you to other options. Liability falls on the sole proprietor of the
business if anything happens and a lawsuit comes upon you. Your personal assets may be seized
and used to cover any debts you have accrued during business operations. In other words, a sole
proprietorship is not a separate legal entity which means you are easily exposed to any legal
turmoil. It is important to keep these things in mind if you consider becoming a sole proprietor as
they could result heavy financial difficulties if you are found liable for any lawsuits filed against
your company.
Partnerships share similarities to a sole proprietorship with some key differences. Like a
sole proprietorship, a partnership is not considered to be a separate legal entity so liability for
legal obligations fall on the partners. Another similarity is that all profit distributed between the
partners are taxes as each partner's individual income. Creating a partnership is simple where
formation occurs from voluntary agreement according to the Uniform Partnership Act (UPA). In
fact, there doesn't even need to be a written agreement between partners to have an established
partnership. There are several forms of partnerships such as general partnership, limited
partnership (LP), limited liability partnership (LLP), cooperative, and joint venture. I can dive
deeper into details of each type if you are interested in pursuing this business organization form
Arguably, limited liability companies (LLCs) are the most popular form of business
organization -- at least most used. One of the primary benefits of forming an LLC stems from the
"safety" feature where liability only extends as far as a participant's