Business formation

case study 

BUSI 561

Discussion Assignment Instructions

Thread:

Review the case study from last week’s Paper: Business Formation Assignment.

Part 1: Hiring

For this discussion thread, explain your analysis and conclusions on hiring Kelsey and Carlos as employees (not including them as partners or co-owners). Focus on the legal issues of including race, religion, and other protected classes in your hiring decisions. We already know Kelsey is a Christian and Carlos is not; assume Shania and Kelsey are Black while Carlos is Hispanic.

If your paper last week addressed these specific questions, you may use that section of your paper as the basis of your answer to Part 1 of this thread.

Part 2: Promotion

Now assume that Shania’s coffeehouse has become so successful that she has 20 employees and needs to promote someone to be the night shift supervisor. The employee base is quite diverse and Shania wants to include diversity in her promotion decision to demonstrate how inclusive her business is.
Explore the legal, Biblical, and ethical issues
if Shania makes her promotion decision entirely on that basis. What are her options?

student will first post a thread of at least 600 words (content, not including references)

For each thread and reply, analysis must be supported with a minimum of 2 scholarly sources and 1 Biblical other than the course textbook and provided materials. Each source must be cited in current APA format. Each thread and each reply must include both full citations in a reference list at the end of each post, and short-form in-text citations.

Acceptable sources include books, legal and business journals, legal cases, the law (cases, statutes, regulations, etc.), the Bible, biblical commentary, etc. Dictionaries and other web sources that lack scholarly support are not acceptable sources. Any sources cited must be current to the issue (e.g., Bible commentaries may by applicable from any age, but articles discussing current legal practices may no longer be relevant after 2 or 5 years).

A well-developed, complete worldview analysis of the situation requires more than simply adding a Bible verse at the end of the post. Each thread and each reply must include at least 1 verse from Scripture, quoted and applied as an integral part of the discussion of the applicable issues in the context of a Biblical worldview.

Copy/paste the content of your posts; do not use attachments, which will not be accepted or graded.

SHANIA CASE STUDY 2

Shania Case Study

Abstract

The main different types of business ownership include sole proprietorship, partnership and limited liability company (LLC). Each of the three types of ownership has its own advantages and disadvantages. Therefore, based on the case study provided, this paper seeks to recommend the best type of business ownership that is suited for Shania.

Keywords

Sole proprietorship, partnership, LLC

1. Which of the business entities under consideration best accomplishes her business goals? Thoroughly explain the reasons for your recommendations

Based on the case study given, I would advice Shania to register her business as a limited liability company (LLC). LLC has many advantages over the other types of business entities. First, LLC would protect Shania from being held accountable for repayment of debts or liabilities of the company. Furthermore, LLC is a like a combination of sole proprietorship and partnership because it comprises most the characteristics of the two business structures. Another benefit that Shania would derive from LLC is less taxes (Silvia, 2013). Despite the fact that LLC regulations vary from one state to another, LLCs do not pay taxes directly from their taxes and this allows the company to pay less taxes as compared to a partnership business. in addition, the losses or profits made by LLC are passed through to members who report them on their individual tax returns. Therefore, Shania will be taxed based on the amount she files as returns from her business. In addition, LLC would allow Shania to partner with different investors who want to be part of the business. LLC would allow her husband to invest in the business despite the fact he would not be involved in the operations and management of the business. Also, LLC would allow her neighbor and her daughter to invest in the business (Silvia, 2013). Since LLC requires high capital to start, allowing the different investors to invest in the business would allow Shania to have more capital for starting the business.

Another reason why Shania would consider LLC is because it can be listed under a different classification such as corporation. This saves Shania from being held responsible for any issues that affect the company. For instance, if the company engages in fraud or fails to pay its debts, or fails to meet legal requirements, creditors can go after individual members. LLC will limit personal liability of Shania as well as that of investors or partners. LLC is viewed as a blend of partnership, which allows business agreement between two or more investors, and a corporation that has certain liability protections. However, the shortcoming of an LLC is that depending on the state, it can be dissolved in case a member is declared bankrupt or dies. Also, an LLC would not be a good option if the primary objective by the founders is to launch a publicly traded company (Corporate Finance Institute, 2022).

2. Which of the interested persons she should include in her business, in what role(s), and why? Your analysis must include Biblical perspectives, such as Biblical considerations of marriage, and business relationships with non-believers. Thoroughly explain the reasons for your recommendations.

Being a Christian, Shania needs to consider people who have the same values as hers so as to avoid conflict of interest. For example, Carlos, a non-Christian has expressed his interest to participate in the business so as to earn extra income. However, being a non-Christian while Shania is a Christian may result in conflict of interest when it comes to running the business and this can contribute to the failure of the business. Carlos may want to engage in business operations that compromise beliefs and values of Shania. Therefore, to avoid this conflict of interests, Shania should consider not including Carlos in the business. Also, Carlos main agenda is to use Shania’s “Christian thing” for his own benefits because he thinks that Shania being a Christian her influence would attract more customers to their business because of the many churches in the area. From a biblical perspective, 2 Corinthians 6:24 says “do not be equally yoked with unbelievers. For what partnership has righteousness with lawlessness? Or what fellowship has light with darkness?”

In addition, as a Christian, Shania would want Kelsey to keep her marriage. Therefore, since her husband, who is a non-Christian wants her to stay at home and take care of their 2 children, involving her in the business, which she wants to use as an excuse to get out of the house can result in their marriage to break. Therefore, based on Christian values and beliefs, Shania should not allow Kelsey to be a member of the business because it can break their marriage. However, on the other hand, Kelsey’s husband should be supportive of her husband. From biblical perspective, Philippians 4:19 says that “Wives, submit to your husbands, as if fitting in the Lord. Husbands, love your wives, and do not be harsh with them.” From this perspective, Kelsey should be submissive to her husband and follow what he tells her to do. However, her husband should not be harsh with her and should also consider supporting her to do the business she wants.

The only person who is in the right position to do business with Shania is her husband, despite the fact that he does not want to get involved in the operations and management of the business, he is willing to invest in the business. with the right agreement, Shania and her husband can form an LLC business.

References

Corporate Finance Institute. (2022). Limited Liability Company (LLC).

https://corporatefinanceinstitute.com/resources/knowledge/strategy/limited-liability- company-llc/

Silvia, C. (2013). Comparative Study: Limited Liability Company versus unlimited liability company. Perspectives of Business Law Journal. Vol 2. Issue 1, pp 70-78

English Standard Version Bible. (2001). ESV Online. https://esv.literalword.com/