BUS 307 SNHU Miracle Cough Syrup Company Start Up Issues Memorandum

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Business Finance

BUS 307

Southern New Hampshire University

BUS

Description

For this case study, craft a professional memo, appropriate in format, tone, and content, to send to your clients Fred and Sally, with your preliminary thoughts on the issues within. Your memo should illustrate the issues and relevant law, apply the facts, and support your conclusions with regard to each issue. Always remember to be clear, kind, and professional in your communications.

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BUS 307 Case Study 1 Guidelines and Rubric For this case study, craft a professional memo, appropriate in format, tone, and content, to send to your clients Fred and Sally, with your preliminary thoughts on the issues within. Your memo should illustrate the issues and relevant law, apply the facts, and support your conclusions with regard to each issue. Always remember to be clear, kind, and professional in your communications. Case Study 1 Fred is well known in his town for his homeopathic cough syrup. After years of encouragement, he has decided to take his miracle cough remedy to market as “Fred’s Miracle Cough Syrup.” While his cough syrup is homeopathic, one of the key ingredients causes a severe reaction when taken in conjunction with aspirin. Fred plans to make and bottle his cough syrup in an outbuilding on the family farm. His son, Sam, has been raving to the locals about his father’s cough syrup for years, and the local drug store and grocer have contacted Fred to place orders as a result. Sam also intends to approach several national chains in an effort to secure supply contracts for Fred’s cough syrup. Fred has asked Sam to assist him with deliveries, as Sam has a van. Fred would like Sam to be involved with the business as an employee initially, with the option of making him a partial owner at a later time. Fred and his wife Sally have two children, Sam and Lilly. Both live in cabins on the family farm with their spouses and children. Fred and Sally engage you as their attorney to assist with the formation of the new business, including determining the appropriate business entity type, management issues, product liability issues, and estate planning for both the business and family property. After your initial meeting, you identify and research the following issues. Specifically, the following critical elements must be addressed: I. II. III. IV. V. VI. VII. VIII. IX. X. Describe the main types of business entities and their defining characteristics. Apply product liability law and determine what issues are present. How would you advise your client to mitigate those issues? Apply the elements and characteristics of an agency relationship to Sam’s actions. Does Sam’s involvement prior to the business formation, as well as his anticipated role once the business is formed, create an agency relationship? Why or why not? Identify potential real property issues based on the location of the business on the family farm. Justify each potential issue. Does the manufacture of Fred’s Miracle Cough Syrup on the family farm necessitate a formal transfer of ownership or possessory rights? Defend your response. Identify potential personal property issues based on the use of Sam’s personal vehicle to deliver the product. Justify each potential issue. Does the use of Sam’s personal vehicle in the course of business expose Sam or the business to any liability issues? Defend your response. Identify potential estate planning issues with regard to the business and the family farm. Justify each potential issue. What estate planning vehicles are available to Fred and Sally should they desire to transfer ownership in the business and family farm, respectively, to Sam and Lilly equally? What are the advantages and disadvantages to each? Applying your analysis of the issues above, which type of business entity do you recommend for Fred’s Miracle Cough Syrup and why? Rubric Guidelines for Submission: Your submission should be a four to seven page memo, use 12-point Times New Roman font, and follow APA 6th edition format for layout and citations. Critical Elements Exemplary (100%) Case Study 1: Business Meets “Proficient” criteria and Entities offers insight into the nuances of each type of business entity in relation to one another Case Study 1: Product Meets “Proficient” criteria and Liability cites specific, applicable rules of law Case Study 1: Agency Meets “Proficient” criteria and Relationship provides a thorough, step-bystep analysis with specific supporting evidence applied to each element of the relevant legal test Case Study 1: Real Meets “Proficient” criteria and Property cites specific, applicable rules of law Proficient (85%) Describes the main types of business entities and their defining characteristics Applies product liability law to determine issues and recommends mitigating actions Applies elements and characteristics of an agency relationship to actions to determine if an agency relationship was created and provides justification Identifies potential real property issues based on the location of the business on the family farm and provides justification for each Meets “Proficient” criteria and Case Study 1: Determines if the manufacturing offers insight into the nuances of necessitates a formal transfer of Manufacture real property issues as they ownership or possessory rights pertain to business and defends response Case Study 1: Personal Meets “Proficient” criteria and Identifies potential personal Property cites specific, applicable rules of property issues based on the use law of Sam’s personal vehicle to deliver the product and provides justification for each Case Study 1: Liability Meets “Proficient” criteria and Determines if the use of a Issues offers insight into the nuances of personal vehicle exposes Sam or personal property issues as they the business to any liability pertain to business issues and defends response Case Study 1: Estate Planning Meets “Proficient” criteria and cites specific, applicable rules of law Identifies potential estate planning issues and provides justification for each Needs Improvement (55%) Describes the main types of business entities, but does not describe their defining characteristics Applies product liability law, but does not recommend mitigating actions Applies elements and characteristics of an agency relationship to actions, but does not determine if an agency relationship was created, or justification is not logical Identifies potential real property issues based on the location of the business on the family farm, but does not provide justification for each Determines if the manufacturing necessitates a formal transfer of ownership or possessory rights, but does not defend response Identifies potential personal property issues based on the use of Sam’s personal vehicle to deliver the product, but does not provide justification for each Determines if the use of a personal vehicle exposes Sam or the business to any liability issues, but does not defend response Identifies potential estate planning issues, but does not provide justification for each Not Evident (0%) Does not describe the main types of business entities or their characteristics Value 9 Does not apply product liability law to determine issues 9 Does not apply elements and characteristics of an agency relationship to actions to determine if an agency relationship was created 9 Does not identify potential real property issues 9 Does not determine if the manufacturing necessitates a formal transfer of ownership or possessory rights Does not identify potential personal property issues 9 Does not determine if liability issues are present 9 Does not identify potential estate planning issues 9 9 Case Study 1: Transfer Meets “Proficient” criteria and Ownership offers insight into the importance of estate planning issues in business Determines estate planning vehicles available to transfer ownership equally and provides advantages and disadvantages of each Case Study 1: Business Meets “Proficient” criteria and Applies legal and factual analysis Entity offers insight, based on research, to form a recommendation on as to why the chosen type of an appropriate business entity and provides rationale business entity would be an appropriate choice for Fred’s Miracle Cough Syrup Articulation of Submission is free of errors Submission has no major errors Response related to citations, grammar, related to citations, grammar, spelling, syntax, and organization spelling, syntax, or organization and is presented in a professional and easy-to-read format Determines estate planning vehicles available to transfer ownership equally, but does not provide advantages and disadvantages of each Applies legal and factual analysis to form a recommendation on an appropriate business entity, but does not provide rationale Does not determine estate planning vehicle available 9 Does not apply legal and factual analysis to form a recommendation 9 Submission has major errors related to citations, grammar, spelling, syntax, or organization that negatively impact readability and articulation of main ideas Submission has critical errors related to citations, grammar, spelling, syntax, or organization that prevent understanding of ideas 10 Earned Total 100%
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Running head: CASE STUDY ANALYSIS

Case Study Analysis: Professional Memo
Student’s Name
Institutional Affiliation

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CASE STUDY ANALYSIS

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Case Study Analysis: Professional Memo
Introduction
Before the commencement of sales, and following the establishment of a business entity,
a company has a task of defining the type of business entity that it runs. This definition is
important because it stipulates the structure that an organization is bound to adopt, as well as the
type of business policies that would apply to that entity (Prakash, 2020). There are fundamentally
four kinds of business entities, that is: 1) Sole Proprietorship-As the name explains “Sole”
implies that an individual or one person, has the responsibility of running a business, and even
though this makes it an exception as a legal entity, the advantage that comes with this kind of
organization structure is that it has a simplistic set-up and nominal costs. However, there is the
danger of a sole proprietor, bearing all the risks and liabilities of their organization on their own.
2) A Partnership-This form of business entity dictates an organizational structure that involves
the sharing of control and profits by different investors (two or more) (Prakash, 2020). The
principle advantage of this kind of business set up is that risks and liabilities are shared amongst
all the owners, reducing the extra burden that is experienced by an individual in the case of sole
proprietorship. 3). LLCs- This form of business entity has conventionally been referred to as
hybrid, founded on the fact that it aggregates the ease of management of a partnership and allows
for liability protection of a corporation with the tax treatment. This type of entity offers
protection to company owners from liabilities and debts (Skripak, 2016). Just as with
partnerships, LLCs also do not require the meeting of owners annually. However, the demerit of
this form of business entity is that it is quite costly to start up and manage and necessitates
periodic annual and filing charges. Additionally, LLCs, through the state, have to file for articles
of organization, which in some instances requires business owners to seek for legal advice. 4)

CASE STUDY ANALYSIS

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Corporations: Corporations as the fourth type of business entities, are the best in helping
investors raise investment capital. Initially at the start of such a business entity, it can raise
capital by selling stock shares. As Amador-Dumois et al. (2013) explain, those who have bought
these shares are then recognized as part owners in the company in question.
Product Liability
According to Brannen et al. (2012), products liability points to the parties involved all
through the production chain, and responsible for the deformations or reduction of quality of a
product. With reference to the case of Fred’s miracle cough syrup, even though it is
homeopathic, the case study indicates that one of the key ingredients has the potential to cause
severe reaction when used together with aspirin. The implication of this is that Fred who is
involved in the production of the syrup is the only party with product liability. To avoid having
to absorb such kind of a liability, Fred could ensure that the effects of use of the syrup with other
drugs is included as part of its label contents. This would help to inform consumers in advance.
Agency Relationship
According to Oteng (2016), in an agency relationship, the principal, that is the owner of a
company accords legal authority to an agent to negotiate or operate on their behalf. With regards
to the case study of Fred, his son Sam, from raving concerning his father’s product, ma...


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