Legal underpinnings of business law

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The reading assignments will help you gain an introduction to the legal system and the law. You can not understand how law comes into play within the business environment without understanding the fundamentals of the law itself. The legal system is defined as a politically motivated system in which all people within the system are required to follow the rules (what we call the law) and if those rules are violated, those same people are answerable to the system of courts which apply the law. (Barnes, 2008, p. 3). Further, we can define law as a set of principles, rules, standards of conduct that

1.    Have general application in society

2.    Were developed by a legitimate authority (typically the government)

3.    Trigger penalties when those rules are violated. (Barnes, 2008, p.4).

Think of a recently passed law and how the above elements factor in. For example, in California, it is illegal to text while driving. (see http://www.drivinglaws.org/sb28.php) This law applies to all drivers. It also was developed by the state legislature and signed into law by California’s governor. Lastly, the law imposes a fine of $20 for the first offense and $50 for subsequent offenses.

Three of your Week One chapters focused on different forms of business entities. Each type of business organization possesses certain advantages and disadvantages. When considering a business form, one must consider seven important attributes: 1) Limited Liability; 2)Taxation; 3)Formalities; 4)Financing; 5)Management; 6)Life of Business; and 7)Liquidity of investment. (Barnes 2008, pg. 467).

Some of these attributes will matter more than others. For example, safety is a major consideration for the majority of investors. A limited partner and shareholder of a corporation may lose their investment if the business fails, but they have no further liability to creditors of the business. (Barnes 2008, pg. 468). In comparison, general partners may lose not only their investment, but also may have personal liability if the partnership assets are not enough to cover partnership debts. Sole proprietors bear the same risk of personal liability. However, if the business involves little risk or the owners have few other assets, liability will be given little weight and as a result, a favorable risk.

Another consideration is how difficult it may be to secure financing. Tax ramifications can also be important. The basic taxation difference between a partnership and a corporation is that a corporation is a separate taxable entity. Corporations pay income taxes on its own income while its shareholders generally pay taxes on dividends from the corporation, although they are paid out of income already taxed to the corporation. (Barnes, 2008, pg. 470). This is one reason why S Corporations and Limited Liability Companies are becoming favorable alternatives.

Even after considering these seven factors, rarely do they point to one single business entity. Often it is recommended that before making a final decision, a CPA or lawyer be contacted. (Barnes, 2008, pg. 475).

Reading Assignment:

Required Text

Please read the following chapters in: Business Law for Managers:

a.            Chapter 1: The Civil Law and Common Law Traditions

b.            Chapter 4: Business Ethics and Conflict Management

c.            Chapter 27: Principal-Agency Law

d.            Chapter 28: Sole Proprietorships and Partnerships

e.            Chapter 29: Limited Partnerships

f.            Chapter 30: Corporations

g.            Appendix A: The Constitution of the United States of America

Recommended Resources:

Text: Business Law for Managers

a.            Chapter 2: Beginning a Civil Lawsuit

b.            Chapter 3: Completing the Civil Lawsuit and Alternative Dispute Resolution

c.            Appendix C: Timeline of Major Modern Legal Developments That Affect Modern Businesses

Websites: Find Laws, Legal Information, and Attorneys – FindLaw. (n.d.). Find Laws, Legal Information, and Attorneys – FindLaw. Retrieved October 19, 2012, from http://findlaw.com

Discussion Forums

Purpose: The discussion forums take the place of the interaction that you would get between the students and instructor in a traditional classroom. As a result, you must score well on your discussion postings to score well in the class. Your posts and all responses must be formatted according to APA style as outlined in the Ashford Writing Center. Please include a list of references when applicable.

Introduction: Your “Post your Introduction” discussion forum is due by the end of Day 1. Tell me a little bit about yourself. If you get a rapid case of writer’s block, here are a few questions you might want to answer: what brought you to Ashford University? What are your educational goals? What are your expectations of the class? Your student introduction is posted by the “Post your Introduction” link in the Week One section. Then respond to at least three of your classmate’s introductions by Monday. Use this as a chance to get to know your classmates.

Discussions One and Two: Your initial postings to the discussion forums are due by Day Three, and your response to two students postings are due by Day Seven, Monday.  This is worth 37% of your grade so don’t forget. You must follow Ashford University Online Netiqutte Rules at all times on the Discussion Boards.  If you have any question as to those rules, don’t hesitate to contact me.

Discussion One Topic: 1st Post Due by Day 3. Constitutional and Legal Underpinnings of Business Law. Review the Constitution in Chapter 31 and choose one of the following sections of the U.S. Constitution or a specified amendment to use as the basis for your initial response: Any of Congress’s enumerated powers under Article I, Section 8

1st Amendment 4th Amendment 5th Amendment 14th Amendment

 

            Identify the section of the Constitution or its amendment that you have chosen. Discuss how this section of the Constitution or its amendments both limit and protect business in general. Describe an example of how the section of the Constitution or its amendment that you have chosen could be applied to your professional life (past, present, or future). In your example, discuss whether the section of the Constitution you have chosen to address limits business or protects it.

 

            Guided Response: Respond to at least two of your fellow students’ posts in a substantive manner. Some ways to do this include the following, though you may choose a different approach, providing your response is substantive: Review the initial posts made by your peers, and note whether the responses relied upon a different section of the Constitution or amendment than your response. If your peer chose to focus on a different section of the Constitution or amendment than you did, discuss how that section of the Constitution relates to any example of a business situation from your professional life (past, present, or future).

 

            If your peer chose to focus on the same section of the Constitution or amendment that you did, then compare and contrast the different applications of that section of the amendment to your respective examples from your own professional lives.

 

Suggest analytical differences that could lead to different outcomes. Point out ways in which the Constitution or its amendments might limit or protect business that your peer did not already identify.

 

            Your posts and all responses must be formatted according to APA style as outlined in the Ashford Writing Center. Please include a list of references when applicable.

 Discussion Two Topic: Ethics and Law. Use three philosophical theories from Chapter 4 to analyze whether it is more important for a business to be ethical or lawful. Provide one example of a situation in which it seems to be more important for a business to be ethical rather than lawful, and one example of a situation in which it seems more important for a business to be lawful rather than ethical.

            Guided Response: Respond to at least two of your fellow students’ posts in a substantive manner. Apply a different ethical theory to the examples identified by your classmate. Discuss the difficulties faced by persons in the workplace who view business situations from different ethical perspectives. Suggest ways that those differences can be overcome while still ensuring the actions of the business are legal.

 

            Your posts and all responses must be formatted according to APA style as outlined in the Ashford Writing Center. Please include a list of references when applicable.

Week One Writing Assignment: Legal Underpinnings of Business Law. Your paper must be two to three pages, excluding title page and references page(s), and formatted according to APA style as outlined in the Ashford Writing Center

            Imagine that you own each of the following businesses: Tinker’s Home Security Service (sole proprietorship) Tinker & Tailor’s Home Security Service (general partnership) Tinker & Tailor’s Home Security Service (LP) Tinker & Tailor’s Home Security Service, Inc. (corporation) Tinker & Tailor’s Home Security Service, LLC (LLC)

a.            The businesses are being sued for breach of contract. In a chart that does not exceed one-half of a page, compare and contrast your personal liability exposure as a result of the different lawsuits. In one paragraph, discuss how you might limit your liability exposure within each particular business organizational form.

b.            After completing the first part of this exercise, describe one business that you may own some day or that you currently own. (Even if you never plan to own a business, pretend as if you will do so for the purposes of this assignment.) Identify the best business organizational form for the type of business that you have described, considering personal liability exposure as well as management, taxation, and ease of formation.

This assignment is Due Monday, Day 7 of the course.

Thank you and don’t hesitate to contact me with your questions.

Janet Fiorentino
Assistant Faculty Professor

References:

Barnes, J., Morehead, T., and Dworkin, E. (2008) Law for Business  (10th ed,)Columbus: McGraw-Hill/Irwin

Cheeseman, H. (2007) Business Law: Legal Environment, Online Commerce, BusinessEthics, and International Issues (6th edition) New Jersey: Pearson-Prentice Hall

Seaquist, G., & Coulter, K. (2012). Business law for managers. San Diego, CA: Bridgepoint Education, Inc.