Business Entities, Laws, and Regulations - Research Paper Example

Business Entities, Laws, and Regulations Table of Contents Introduction 2 Restaurant/Bar 3 Extermination Business 4 Construction Scenario 4 Conclusion 5 Works Cited 6 Introduction A business entity is an institution that is known to be principally engaged in economic functions such as production related to goods or distribution of services with the intention to earn profit and sustainable growth. The promoter or the entrepreneur decides the size of the entity, structures of the ownership affirming whether the entity will be operated by the sole trader or on a partnership basis and the location in which the business will be operating. The promoter takes the responsibility to combine the resources needed to operate a new business in the form of human resources, machines, materials and monetary capitals. All these factors play an imperative role in the process of establishing new and profitable enterprises. Therefore, prior to starting actual business operations, the initiator has to act in accordance with political and legal components with due significance. Certain decisive factors that can be identified to exist in the pursuit of establishing a business concern, such as registration of the business and other formalities, have to be thoroughly pursued before commencing its operation (Costello, “Starting New Business”). Thesis Statement The objective of this paper is to assess the factors to be considered as well as the risks involved in setting a new entity. With this concern, three situations has been considered to studied focusing on the various aspects of a business including its finances, promotions, legal requirements, taxation policies and recruitment operations. Restaurant/Bar Lou and Jose have planned to open a sports bar and restaurant, but they seem to have insufficient funds to support their business plan. However, Miriam, an investor, wants to provide capital to start business on a partnership basis but has no time to participate in the day to day affairs of business. With this concern, Lou and Jose have the option of either to accept the proposal of Miriam or to take loans from other institutions as they are short of fund. It can be stated in this respect that it will be profitable for Lou and Jose to accept the proposal of Miriam which would facilitate the sufficiency of fund in return of a certain percentage of ownership, thus reducing the debt as well as interest rate risks. However, it is worth mentioning that prior to launching a business as a partnership concern, legal agreements should be signed explicitly documenting the rights and liabilities of each member. The other most important criteria in the bar and restaurant business is to acquire license to serve alcoholic beverages to the customers. This license can be obtained from the government owned licensing departments by submitting an application to the concerned authority. In addition to the alcohol supplying license, the entity should also acquire entertainment license from the local government which includes the permit to broadcast sporting shows on large television screens along with facilitating live amusement activities and dance performances. Since the business requires heavy investment on furnitures, décors and other equipments, necessary investments should be made in terms of insurances so as to avoid any risk related to these factors. In terms of taxation policies, the partnership firm is termed as a separate entity and is liable to pay corporate tax charges on the basis of its net profit, whereas, the individual partners are charged with tax on their personal income from the business. Extermination Business In this particular case scenario, Frank, an investor, plans to open a chain of exterminating businesses across the United States. With this purpose, Frank needs to decide upon the type of organization he will be forming. Since he is the only investor, he may form a sole proprietorship structure of business with no division between the entity and him where he will be solely liable of controlling the entire operations. Likewise, the profits or any losses arising out of the business have to be bored by Frank. Besides, Frank also needs to fulfill certain legal formalities. He can obtain the necessary trade license from the local government. Since pesticides may have hazardous impacts on the employees as well as the residents, Frank must ensure sufficient safety measures in order to avoid such damages and consequential legal hazards. Construction Scenario Mei-Lin desires to hire a jackhammer operator for Surebuild, Inc, and has received applications from four different candidates. The company has also set criteria for the applicants prescribing that the applicants must possess a high school diploma along with a considerable period of experience in the field. The first applicant, Michelle, aged 35 years, possesses a high school degree along with an experience for the job and certainly suffices all the criteria required for the vacant position of a jackhammer. However, concerning her health issues, as she is pregnant, she must not be selected for the position where her job roles will comprise of physical work. It is worth mentioning in this regards that only if she manages a medical statement from a doctor allowing her to do the job, she might be permitted for the position under the “Pregnancy Discrimination Act amended Title VII of the Civil Rights Act of 1964” (EEOC, “Facts About Pregnancy Discrimination”). The second applicant, Eric, aged 55 years possesses a considerable experience in the field, but fails to hold a high school certificate. The third applicant is Felipe, 38 years old, is competent and skilled for the job. However, similar to Eric, Felipe also does not possess a high school certificate and cannot speak English. The last and the fourth applicant is Nick, aged 23 years, possessing a college graduation degree which certainly higher than the required educational qualification, but is epileptic and has no experience. Based on his lack of experience, Nick can be regarded as unsuitable for the job failing to satisfy the criteria prescribed by Surebuild, Inc. It is in this regard that Eric and Felipe can be considered for the vacant position, however, as neither of them holds the required educational qualification, it will be suggestible for Mei- Lin to opt for a discussion with the company before recruiting the applicants. Conclusion Setting up of fresh enterprise requires immense efforts and dedication from the initiators or rather the entrepreneurs where several factors require being analyzed before the commencement of the business so as to protect its functions from getting disrupted. Legal issues related to the business in terms of licensing must be satisfied along with the acquisition of other requisite permits. Taxation policy of the company must not be focused towards evading the government taxes, but endeavor to minimize the tax payment in a legal procedure. Last but not the least, the company must ensure that human resources are recruited through an efficient way, identifying their potentials, including strengths and weaknesses. Works Cited Costello, Chris. Starting New Business .Risk and Reward, 2007. Web. 12 Jul. 2012. EEOC, Facts About Pregnancy Discrimination, 2008. Web. 16 Jul. 2012. Read More