The established business entities currently began as soleproprietorships. However, with the continued growth in operations, ithas become mandatory for businesses to expand their operations. Thedemand for the products increases as many customers wishes to havemuch of the commodities. Similarly, interest by different investorsis likely to be witnessed as many of them decide to purchase stock inthe business. Through the activities, business growth is encountered.However, the growth of the business makes it mandatory for the smallbusiness to upgrade their operations. The need for scale up is met bythe change from one entity to another. Business owners have tograpple with the need to adopt the most appropriate entity that willsatisfy the demands of the customers while at the same timeincreasing the overall products of the company. The transition of from a sole proprietorship to a C Corporation companywould be instrumental in enabling the company to realize its bestpotential.
The Uniform Commercial Code will govern the formation of the company.The UCC is of fundamental significance for the role it plays ingoverning commercial transactions in the United States (Livingston,2012). will be transitioning to a C Corporationentity. The level is associated with numerous legal activitiesnegating the need to have an appropriate system in place tofacilitate the determination of various issues that arise. Thecontracts that will be formed need to be governed by a universal lawthat facilitates ease in transactions that would be involving theexecution of business dealings. The law harmonizes the businessoperations across the United States. The fact that the company willbe transitioning to a C Corporation means that they will be engagedwith different individuals across the United States. Because of thesame, it becomes essential to have a law that is all inclusive.
Analysis of Formation of a Contract
formed a contract with the businesses. In drafting thecontract, numerous factors were taken into consideration to ensurethat transactions are executed with ease. The five elements of anenforceable contract that would be applicable are an offer,acceptance, and consideration, mutuality of obligation and competencyand capacity (Rendon, 2016). In making the contract, an offer wasprovided by the businesses to for the manufacturefireworks in bulk. The businesses would then agree to make payment to upon completion of the production of the requestedproducts. It is up to to accept into making theproducts. However, before the agreements are reached, the businessesmust depict intent that indeed, they would be able to make thepayments as a way of ensuring that they keep their end of thebargain. The offer would be enforceable upon agreement by bothbusinesses that everyone would keep their end of the bargain.
The decision by Acme to make the product would be depicted in theform of acceptance of an offer. In this, there would be evidence ofacceptance by both and the businesses to engage inbusiness. will be involved in the manufacture of thefireworks while the businesses will be responsible for payment of theservices. The acceptance will be designed in line with the agreementmade at the offer. However, the acceptance will only be valid to theextent that both parties have an understanding of the issue.
Further, there is the aspect of consideration where each of theparticles involves must offer something that can be used to inducethe transactions. The businesses providing the offer must be willingto provide an incentive that would be used to initiate the business.In the same regard, must ensure that they takenecessary measures to convince the business that they would indeed bewilling and able to make the fireworks as agreed. Mutuality ofobligation is equally applicable if Acme decides to engage in abusiness transaction with the partners. The formation of theassociation between will require that each of theparties is bound to execute their duties. Under the element, neitherof the parties will have the absolute right of dissolving theengagement. Both Acme and the businesses that engage in thetransaction must commit to standing by what is expected of them.Next, competency and capacity are part of the issue that will have tobe taken into consideration in the process of formation of acontract. Fortunately, both parties have the legal capacity thatallows them to engage in the business. Both the owner of Acme and theinterested businesses have the ability to take part in the business.The writing requirement is the element that applies to both AcmeFireworks and the businesses. The decision reached by both theparties can be recorded as a way of ensuring that none of the partiescommits fraud based on a non-existent agreement. Finally, theagreement reached by both the parties can be ratified throughformation under the U.C.C.
Potential Personal Liability
The sale of fireworks to different individuals can result in variousunexpected occurrences. For example, individuals can be injured inthe event of display of a particular firework. The occurrence of suchan incident must be followed by taking into consideration variousfactors. as a business could decide to take allprecautionary measures against the incident. However, an unpleasantevent could occur, and an individual or groups of people could getinjured because of the fireworks. The case that would ensue would beon whether the business took measures to avoid the potentialoccurrence of the event. However, Acme could take the responsibilityto inform the users of fireworks on how to prevent the possibleoccurrence of injury. The rules ought to be laid down as a way ofensuring that there is no breach. If the incident occurs, it shouldbe assessed to determine whether or not had informedthe users of the potential adverse effects of the fireworks. Otherfactors that may need to be taken into consideration regard the issueof whether or not the injured spectator was invited to the event orthey had trespassed. The understanding of the legal status of thepatient is mandatory as a way of determining the course of the case(Tromans, & Irvine, 2014). However, it is equally necessary toensure that it is entirely determined that exhibitednegligence on the entire issue. If it is confirmed that the spectatorwas injured because of negligence, then it would be theresponsibility of to take responsibility for the same.It could equally be vital to assess whether violated aparticular aspect regarding the safety of the spectators. Upondetermination of the same, it could be essential to holding AcmeFireworks responsible.
Employment Types and Relationships Relevant to Agency Law
The business operated by is one that is defined byuncertainty regarding the demand for the product. There are fearsrelating to the ability of to pay the workers in theevent the demand for the product goes down. Because of the same, itcould be essential to see to it that the business engages aparticular form of employment as a way of ensuring that they do notget strained regarding the business activities that they would beinvolved in. Different types of employment exist to choose from(Sakurai et al., 2014). The first type is the part-time form ofemployment. Individuals in this group have the same benefits as thosewho are fully employed. They are protected in equal measures as thefull-time employees. However, the part-time employees could need towork extra hard before getting similar rights as their full-timecounterparts. Fixed-term employment is the other option that existsfor . The individuals can be employed for a particularpurpose. It could take the form of a contract since the employeeswork for a fixed duration of time. The employer is not obliged torenew the contract for such individuals. The other form of employmentis the casual type. Those employed under the circumstances arerequired to work only when they are needed to do so. However, theemployees have similar rights as the others for as long as they workfor the organization.
Acme could adopt either of the stipulated employment types in hiringthose who will be involved in the execution of the mandate assignedto them. Part-time employees present with an opportunity for theorganization to lay off the workers if there won’t be any jobavailable for them to execute. It is an easier option especiallyconsidering that there are times when it is expected for the demandof the products to go down. The part-time employees would not beneeded. It is a benefit for the organization especially as pertainsto the ease of terminating the association with the employees. Acmecould equally decide to introduce the fixed-term form of employmentwhen it comes to hiring the employees. For example, the decision bythe businesses to engage in partnership with the company mean thatthey are doing so because they expect the demand to go upcontinually. However, if expectations are for a reduction in demand,the chances are that there would be no need to engage Acme intoproducing the fireworks. The disadvantage of the form of employmentis that employees can be employed on a fixed term contract based oncontinued demand of the fireworks. If the demand goes down after agiven duration of time, the company could decide to lay off theemployees. The disadvantage is that the company is bound to keeptheir end of the bargain until the expiry of the contract. If thedemand goes down yet the duration of the contract is not yet over,the Acme will have to compensate the employees if they decide to laythem off. The alternative could be the adoption of casual employment.The employees will be hired for as long as there is work. Thedisadvantage regards the motivation of the employees to work. Most ofthem may not be dedicated to working as would be expected.
Reasons not to operate as a Sole Proprietorship
should cease to be a sole proprietorship because ofthe disadvantages associated with the same. The business should belooking forward to the expansion. The decision to engage in thefireworks business means that there are high chances of the demand ofthe product being high. Expansion of business activities through asole proprietorship may be a challenge for the business (Moll, 2014).The business needs to have a vision and work towards the achievementof the same. It is evident that different companies have asignificant interest in engaging with the firm. It is an indicationthat various firms have seen potential in the sole proprietorship.That should be a reason to have cease being a soleproprietorship and instead focus on a different business entity thathas the potential for growth. The goal of any business is to ensurethe realization of profits. Acme has potential for growth especiallyif it opens doors to investors. The investment would be beneficialfor the organization considering the demand for their goods. Further,the decision to move from a sole proprietorship to a differentbusiness entity will present a new challenge to the firm. Thechallenge will be essential in enabling the organization to set newgoals and objectives. Strategies formulated by the organization willbe helpful in taking it to a whole new level.
could decide to form a C Corporation. Multiplebenefits exist for the business in deciding to transform into a CCorporation. The entity has the benefit that there would beperpetual existence even if the original owner of the company decidesto live. The decision to adopt the new entity emanates from the factthat it will result in the in continued growth. Further, a CCorporation guarantees credibility. The growth of the businessnegates the need to adopt the most professional ways of executingactivities. The increase in revenue received by the company couldresult in those involved in deciding to embezzle funds. However,through the adoption of a C Corporation, the possibility of such anevent occurring is curtailed. The increase in the number ofshareholders who show interest in doing business with theorganization will demand a high level of accountability. Thetransition to a C Corporation would mean that there is no limit onthe number of shareholders the company can have. needsto look at the potential avenues for growth. An increase in thenumber of shareholders means that more stock is brought to theorganization. The process of production will equally be enhanced asthere are funds to support the entire activity. The company will nothave to worry about the number of employees they have to hire andwhat would happen if the demand for commodities goes down. Thetransition to the C Corporation would also mean that the firmdiversifies its overall operations. The effect would be an increasein overall revenue.
Overall, has shown significant potential when it comesto engagement in the fireworks business activities. However, the factthat it is engaging in a sole proprietorship means that its capacityto grow is limited. The business needs to transition to a newbusiness entity that would be essential in profiting theorganization. The formation of a C Corporation and expansion ofproduction activities will have a positive impact on the business’growth.
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Rendon, M. (2016). Use of UK/US common law contract law ininternational business contracts in Southeast Asia Empirical Evidencefrom Telecoms & Engineering. Journal submission manual-ASEANJournal of Management & Innovation, 3(1), 65-81.
Sakurai, K., Nakata, A., Ikeda, T., Otsuka, Y., & Kawahito, J.(2014). Employment type, workplace interpersonal conflict, andinsomnia: a cross-sectional study of 37,646 employees in Japan.Archives of environmental & occupational health, 69(1),23-32.
Tromans, S., & Irvine, G. (2014). Taking Responsibility:Personal Liability Under Environmental Law. Routledge.