Week Five Assignment

This type of entity leave behind provide the restraint of a m closedown proprietorship while placing indebtedness on the argument quite a than the individual. Fireworks demand the potential to be dangerous, causing serious damage to both spate ND property. The potential for indebtedness associated with the use and/or manufacture of fireworks is unavoidable. whatsoever one of the following defects may expose the man effectuate to li might for injuries that argon ca utilise by their product design defect, manufacturing defect and defect in marketing, (McLaughlin, &038 Laurite, 2014).Liabilities associated with these defects include intentional civil impropers, negligence and strict liability. The first step to avoiding an advance on ad hominem assets is relocating operations to an bea zoned for the manufacture of fireworks. No issue what the entity, the manufacture of explosives in a residential atomic number 18a lead enable a liability protection to be penetrated. A n intentional tort each(prenominal)ow materialise when the manufacturer sells a product that he knows is defective or dangerous of which injuries be certain to occur. In much(prenominal) cases, top of the inning has a duty to warn the consumer of potential harm.If cover fails to provide warnings or rec eachs on its products, it croupe be held liable for battery to anyone injured by its products. fit to a 1903 product liability case, a company is liable for weakness to nonify the buyer that the product is potentially dangerous, is effective, or negligence in the manufacture or cut-rate sale of a dangerous product. contact phratry v. J. I. Case Threshing Mach. Co. , 120 F. 865 (8th Cirri. 1903). Should a mishap occur during the manufacture, sale or storage a fillet of sole proprietor forget be liable for any and all property damage incurred to both himself and/or his neighbors.With a sole proprietorship at that place is no statutory none between the proprietor and t he barter thus, he is at peril of losing personal assets in a fairnesssuit against the business. Should injury, death, or damage to property occur from intentionally manufacturing or selling a ungenerous product, both the manufacturer and suppliers can be sued for unintentional injuries. This risk extends beyond the manufacture and go forth of the fireworks it in like manner includes care in design and use. For instance, should a consumer purchase defective big top Fireworks from a retailer and sustain injury to him and others, ACME can be sued.See Boeing Airplane Co. V. Brown, 291 F. Ad 310 (9th Cirri. 1961). Strict liability in tort arises when someone suffers an injury not from anyones willful negligent act, but rather by engaging in some intrinsically dangerous action mechanism or, under certain resistances, through the manufacturing of unsafe products, (Rogers, S. 2012). Courts today, rationalize strict liability by establishing the fact that manufacturers are better pos itioned to prevent risk of spillage than, that Of the consumer. As such, it is the responsibility of the manufacturer to ensure their products are safe.In night club to be strictly liable for a product, the plaintiff must(prenominal)(prenominal) demonstrate that there is a defect, the defect was caused by the manufacturer and in turn, was the cause of injury. See Kerr v. Corning Glass, 169 N. W.. Ad 587 (Min. 1969). In order to determine Contract Viability, it s cardinal to review the agreements between ACME and the retailers. Examine each carry cautiously ensuring it contains five essential elements. The legitimacy of the agreements is dependent upon it containing an offer, acceptance, consideration legality and capacity.To get ahead explain, an offer is an invitation to enter into a contract. If a company agrees to the terms depict in the offer, they micturate thus accepted the agreement. Once an agreement has been recognized, it must be established that both parties hav e intentions to enter into a legal binding contract. The considerations of his agreement are legal exchanges for services or products. For ACME Fireworks, this will include the prices paid for the fireworks and the amounts desired. In order to be lawfully binding, the cost of doing business must not be illegal and, the ability to perform must not be impossible.Finally, it must be located that both parties have entered into the contract freely without coercion or duress. Additionally, the law prohibits contracts made with persons of diminished mental capacity and minors. The contract probability concerns itself with the exploit particular(prenominal)ations and acquirement of the agreement. Though the agreement appears to be viable, if it lacks a specific cognitive operation strategy, it will not have a future. The probability Of the agreement to persevere in force will be dependent upon the period of consummation and quantities desired during that period.Fireworks are seasonal whereby a retailer agreeing to order heavy(a) quantities on a regular basis is not realistic. There is no guarantee the quantities will bide lieent throughout the contract period. Additionally, ACME is concerned about failing to play off its contractual obligations should it not conduct enough people. The basic questions that need to be addressed are how and when to order, amounts to order and what happens if ACME fails to deliver? The proprietor is concerned that there will not be enough work for the additional employees once the initial orders have been filled.The terms and conditions of the contract will determine the type of employees ACME will hire. At-will employment provides no obligation of continuous employment once the orders have been filled. For this reason, the law allows an employer to terminate without just cause or reason. Generally, this rule is apply for seasonal work. ACME Fireworks has several options to consider in acting contract demands, performance an d productivity. By hiring temporary full-time associates, ACME can pronto discover demands however there is no incentive to maintain a standard of quality or productivity.Same is true for part-time associates as their hours are usually dictated by the needs or demands Of a business. attachment for casual and day intentness employees might prove useful. Casual employees typically work on an as needed basis and usually consist of single parents, college students or applicants seeking extra money. Temp Agencies provide labor on a daily, weekly or monthly basis. Typically, temp theatrical performance employees that excel are offered permanent positions within an organization. Hiring regular employees on a probationary basis will allow ACME the ability to meet the quality, performance and productivity of the contract.Generally a just-cause type of employment this employee is evaluated at the end of a specified period based upon certain criteria. If an employee fails to meet standards then they are usually let go. With the increase in business surface and operation certain liabilities can raise concern. It is primary(prenominal) to understand the differences associated with the contrasting entities when choosing what best fits your organization. Whether choosing a Sole Proprietorship, a Partnership, a Corporation or a Limited Liability Company, it is important to assess all the risks associated with the disposition of the business.Currently, ACME Fireworks operates out of a garage and the owner enjoys complete familiarity over operations. Operating as a Sole Proprietorship, the business and the owner remain one and the same. This provides the highest risk of loss to personal assets. The disadvantage is that a sole proprietor has confine options for raising capital and no limits on liability for business debts thus if the business does not fare well, the sole proprietor can face personal bankruptcy, (Rogers, S. 2012).As a partnership, ACME Fireworks will sh are ownership with two or more people. Partners are mechanically owners and managers of the business, and the law presumes equal rights unless the partners have specified otherwise, (Rogers, S. 2012). In a partnership, taxes are assessed on the earnings of the partners and not that of the business. Should the company plough party too lawsuit or is unable to make full its contractual obligations, the personal assets of all the partners can be used to satisfy a judgment by the court. Partners are not only liable for their own actions, but also for the business debts and decisions made by other partners. In addition, the personal assets of all partners can be used to satisfy the partnerships debt, (SABA. Gob, 2014). Should ACME Fireworks consider a Corporation, it will become an independent legal entity. The owner(s) will then become shareholders which will limit their liability and legal responsibility. In order to remain free of any personal liability, the company must operate ac cord to state corporation laws. If the corporate form of business organization is used to defraud creditors, stockholders will lose the protection of limited liability and will be held in person liable for all debts of the corporation, (Rogers, S. 2012). Since a corporation requires the file of complicated forms, annual reports and fees, it can prove costly for a petty(a) company. Additionally, a corporation is double taxed whereby the company pays taxes on its earnings and the shareholders pays taxes on dividends paid UT. A Limited Liability Company (LLC) provides the limited liability features of a Corporation but operates like a partnership or sole proprietorship.A LLC typically features easier formation (although filing under the statute is required) and abase filing fees, flow-through taxation where members of a LLC are taxed on their earnings, but the business itself is not taxed, the stability of a corporation (a members leaving will not dissolve the LLC), and limited liabi lity, where the business is liable for its debts and the people who own it are not, (Rogers, S. 2012). Since ACME Fireworks is a small business with a single owner, a LLC will provide a low cost alternative that provides limited protection of personal assets.Unlike like a corporation, the taxes, profits and losses are passed through to each member of the LLC. Members are protected from personal liability for the actions and decisions Of the LLC. However, in the case of outlaw(a) or illegal acts, the limited liability can be pierced and personal assets can be assessed. Additionally, it is important to separate business funds from personal funds. Should ACME use a personal ann. account to pay its creditors, they can in turn pierce the limited liability and seize the owners personal funds. The Federal Government does not recognize a LLC as a separate entity as in a corporation.As such, the owner(s) of ACME Fireworks will file their shared earnings on their personal income tax. If the LLC is a single owner operation, income will be report on a Schedule C just like that of a sole proprietorship. Should there be more than one member manduction in the profits and losses, a form 1 065 will be filed as is done in a Partnership. The entire net income of the LLC must be accounted or in the filings of all members involved. The owner of ACME Fireworks has asked for advices in choosing an entity that would provide the least risk to personal assets, should he fail to meet his contractual obligations.It is important for ACME Fireworks to understand the risks associated with the nature of the business. In assessing the trustworthy operation, ACME Fireworks operates out of a garage and currently employs approximately 15 people. The liabilities associated with the manufacture of dangerous materials poses a high risk to personal assets should a mishap occur. Before engaging rather, ACME must consider relocating to meet both local and state zoning laws. Additionally, Federal OS HA standards must be in place in order to release the owner of allegations associated with safety, wrong doing, or negligence.The law provides certain protections associated with Alls and Corporations. As a sole-proprietor, ACME Fireworks and the owner are one in the same. Should the company fail in its obligations or fail to warn and/or injure a consumer, the owner is held personally liable. If ACME is to pursue a partnership, the partners share in the personal liabilities of the company. For he production of what is considered dangerous materials (fireworks), the risks associated with injuries from product liability to manufacture are substantial.The company IS liable for intentional torts, negligence and strict liability as such n all a sole-proprietorship nor partnership is suggested. As a manager of ACME Fireworks, would recommend the company pursue a Limited Liability Corporation. jibe to the Small Business Administration, Members are protected from personal liability for bus iness decisions or actions of the LLC, (SABA. Gob, 2014). Essentially, if the LLC becomes party to a suit or is unable to fulfill its obligations, members enjoy the same protections as that of shareholders in a corporation.However, as a limited liability company, they are not exempt from litigation involving wrongful acts by its members or employees. In a LLC, the owner will support control over the company as in a sole-proprietorship and lessens the risk of personal liability. The owner is also concerned with ACMEs ability to meet either contractual obligations or make payroll. The LLC would provide the protections it needs without relinquishing control to a Board of Directors, as in a corporation. Without knowing the specific terms and conditions of the agreements, it is difficult to ascertain viability and validity.