Legal, Ethical, and Regulatory Issues in Business Case Study - 1

Legal, Ethical, and Regulatory Issues in Business - vitrine Study ExampleIn most case profit of the phoner is always sh ard with love to the ratio of capital contributed by the partners into the business and the same case applies to sharing of loses. All partners in global partnership have equal right towards decision-making considering that each partner equally participates in management and swan of the organization affairs. 2. It is noneworthy that the general partnership has unlimited liability and as such failure of the company to clear its debt obligations the personal property of the partners will be confiscated by the creditors (Cheeseman & McDonald 86). John Albert and Matthew Baker will be directly liable for all the liabilities of Lending Store. Failure of the general partners to clear the claims of the creditors will certainly pull out them lose their personal property to settle the debt. This means that the liability of general partners is a direct obligation of the partners and as such, the partners must stand up for the responsibilities once they occur. 3. Forming a grass involves many paper performance and legal requirements unlike partnership and sole proprietorship. The first step in forming a corporation in Arizona starts with searching for a business name. The chosen name must be checked with the register to ensure that it is not used by some other company or does not infringe another companys name or trademark. The second step involves registering the business name. The third step involves choosing of directors who empennage make vital policies and financial decisions such as authorizing stock issues. The fourth step involves filing the corporations articles of incorporation with the Arizona state somatic filing office. The fifth step involves writing the unified by-laws. The corporate by-laws are the guiding principles of the daily affairs of the organization. The sixth step involves creating a shareholders agreement which h elps the owners forebode various corporate issues such as voting rights, and intellectual property rights. The following step involves rule the first meeting of the board of directors. The seventh step involves issue of certificates to the equity owners. This stage is important because a corporate is required not to commence business before officially dividing owners interest in the organization. The next step involves obtaining business licenses and permits for the corporation from the relevant authorities that is federal government, state of Arizona and the local government. hence afterwards a business can begin operations. 4. Once Albert and Baker have formed a corporation, the company will be personally liable for its own liability. This means that Albert and Baker will not be personally liable for the debt of the organization. This is because corporate bodies normally have a separate life from its owners and as such, it can operate everything that a human being does on its own. In other words, corporate bodies are artificial persons and as such, they can sue or be sued for failure to honor their obligations. The liability of the corporate owners is limited to the amount of money they have contributed towards acquisition of company assets and other investments (Cheeseman & McDonald 112). Albert and Baker are buffer from the loss of personal property whenever the company fails to honor its debt obligation by the amount contributed they have to the company