Business Entities, Laws, and Regulations Paper

1738 WordsSep 9, 20107 Pages
Running Head: Business Entities, Laws, and Regulations Paper Business Entities, Laws, and Regulations Paper Abstract The following paper includes the consideration of control, taxation, and liability issues for two hypothetical businesses as well as legal, regulatory, and risk issues each of the two businesses may face. Also included in this paper is a hypothetical hiring manager scenario in which the hiring manager must choose from numerous applicants who possess various levels of qualification, experience, and education. An applicant must be chosen from the pool of applicants based on the advertisement placed for a jackhammer operator and any legal or regulatory issues to be considered for each applicant. Restaurant/Bar…show more content…
Professional Practice Scenario According to the scenario, Akiva and Tara want to open a birthing clinic and take out large loans to finance the business, which is a medical practice. The business would be a partnership of two medical professionals that would allow Akiva and Tara to form a limited liability partnership or LLP. An LLP is beneficial for the partners because each partner is only liable for debts or obligations up to the capital contribution or investments in the partnership (Cheeseman, 2010, p. 274, pp. 1). Forming an LLP begins with filing articles of partnership with the secretary of state of the state in which the LLP is organized. The LLP laws of the state where the LLP performs business govern the partnership. The partnership must follow the state laws and regulations to continue performing business in that state. Many states require an LLP to carry a minimum of $1,000,000 in liability insurance covering negligence, wrongful acts, or misconduct by partners or employees. Taxation of the LLP is the same as in a general partnership. Each partner is required to file their profits or losses on their personal income tax return. As with a general partnership, an LLP is required to file an information return with the government so the income or losses are traceable to the individual partners. Because Akiva and Tara want to open a birthing clinic, they must prepare for liability issues.
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