Sole Proprietorship Business and Doctrine of Employment at Will - Essay Example

Question The most notable advantage of a sole proprietorship business is that it is easy to establish as it needs low capital and not many documents are required. Another advantage is the owner controls everything, thus makes all the decisions in the business and in the end takes control of all the profit from the business. The demerits include the lack of good financial documents and the shareholders are liable to all debts acquired by the business. Question 2 The first advantage is that, in a cooperate business, no one person is liable for the assets and debts acquired by a business. This separates personal assets from business assets hence cannot be involved in lawsuits. The other advantage is that cooperate business has a continuity agreement, in that even if one member dies the other shareholders still have it alive. Disadvantages come in when it is required to file many legal documents such as the certificates and articles of incorporation, which may take long and is cumbersome. Another major disadvantage is that cooperate business do get tax deductions when distributing dividends, and this eats up into shareholders earnings. Question 3 "To pierce the corporate veil" refers to the possibility of someone to sue the owners of the corporate business. The corporate shareholders are thus held personally liable for the assets and liabilities of the business. Double taxation happens when the cooperate business is taxed for being a corporation itself and the second time when distributing dividends which are profits paid to shareholders in return of their investments. Question 4 I would prefer to start a partnership business for a small cafe/restraint business, where I would sell beverages and snacks. If managed well, a restaurant business can be very profitable as food is one of the basic needs of a human being implying that customers would always stream into the restaurant provided high quality services are provided. Restaurants do not need a lot of capital and expertise to start, all it needs is a spacious room with furniture, a well stocked kitchen, a couple of employees, cooks and waitresses. I prefer a partnership business with two partners where every partner has equal responsibilities to the business and is involved in the daily operations of the restaurant. Partnerships are relatively easy to start and compared to sole proprietors, the partners can raise a higher capital to start the business. Partners help each other in business decisions for instance interviewing employees or signing in a new contract. In connection to my restraint business, my partner should have a hotel and catering skills to compliment my business skills. With a partnership, it is easier to get credit facilities because they have unlimited liability hence easier to raise sufficient funds to run the restaurant. Lastly, a partnership business is easy to dissolve as there not many legal restrictions. When the partners decide to go separate ways they just need to agree on how to split the assets and benefits after paying all the debts. Question 5 General liability- Here, the court will have to establish who has right to control the work and workers performing the duties. Parties Intentions- The intention of parties is also considered when differentiating an employee and a contractor. The court should check the agreement between the parties. Financial control- In determining a person’s status, financial issues are also important. The court should establish who pays the workers and where they get tools to perform their duties. Tax- If the worker is an independent employee, he is supposed to pay taxes from his/her pocket but if the worker is a contractor the hiring parties should pay his taxes. Working time- If the working time is longer than that of a usual contract, then the workers lean more towards the employee side than a contractor. Question 6 In legal terminologies," respondeat superior" means the employer is liable for the mistakes of their employee committed on the scope of work (Marsh & Stanley 109). In case of any tort made by the employee the court should consider: • The intentions of the employee. • The type of work the employee was supposed to do. • Amount of time and freedom the employee is allowed on scope of work. • Nature, place and time of the employees conduct. Question 7 Doctrine of employment at will This refers to where an employer can terminate an employee’s job without any reason or warning (Marsh & Stanley 123). Employment is supposed to be voluntary and indefinite for both parties. According to this doctrine the employer can fire an employee or the employee can quit without reason. Exceptions to this doctrine are: • When the employee and employer have an implied contract. • In case of a covenant of good faith which states that if the employee has a long working history with positive reviews should not be terminated without good cause. • If the termination of employment sabotages a government policy. • The employee cannot be discharged for complains and decisive actions. Question 8 In a disparate treatment case, the employer is accused of treating an employee differently from the others. For example, if two workers skipped work a day, but the employer fired one, then this is disparate for treatment case. In a disparate impact case, the employer is accused of having a practice that has a much bigger impact in one group than the other. For instance, the employer cannot employ janitors who cannot speak a certain language. Question 9 Defenses to employment discrimination • Employee performance- If the employees’ performances are poor and have been for sometime, the employer has all the right to terminate employment. • Failure of the employee to meet statutory requirements like deadlines. • Where the employer might have wronged the employee, but if the complaint is filed five years later the suit will not stand in court. • Bona Fide Occupational Qualification (BFOQ), which refers to the ability of employers to hire only people with specific qualifications, which seem to favour a particular group of people. Work Cited Marsh, J. Stanley Brian & Soulby John. Business Law. Cheltenham: Nelson Thornes, 2002. Print. Read More