BUS3055 SOUTH Business Organizations Warranties & Account's Liabilities
1.Business OrganizationsBefore beginning work on this week's discussion forum, please review the link "Doing Discussion Questions Right," the expanded grading rubric for the forum, and any specific instructions for this week's topic.The discussion assignment consists of two parts. Select one of the questions for Part 1 and answer Part 2.By the due date assigned, submit your answers to Part 1 and Part 2 to this Discussion Area. Post the answers to both parts in one thread. Label your answers Part 1 and Part 2, but do not repeat the scenario text in your responses. Start reviewing and responding to your classmates as early in the week as possible. You should review and critique the work of other students as outlined in the expanded rubric by the end of the week.Discussion Question Part ISelect one of the scenarios listed below and explain the best solution for each. Include comments related to any ethical issues that arise. You should locate at least one scholarly source from the SUO Library or one case that has been decided or is currently pending to support your answer.Scenario 1 – Corporate Formation and Shareholder LiabilityRonald Powers, a well-known local entrepreneur, owned several businesses that filed for bankruptcy from 2010 to 2015. Last year, Powers established R. P. Properties, Inc. Powers is the sole shareholder and invested $2,500 in the company as a capital contribution. R.P. Properties, Inc. purchased 4 houses using a $600,000 loan obtained from the bank. Powers planned to fix up the homes a little and give renters a break on the rent if they agreed to do some repairs. R.P. Properties skipped several mortgage payments on the houses even though his tenants paid the rent. R.P. Properties is no longer able to pay its bills. As one of R.P. Properties' creditors, you seek to hold Powers personally liable for the debts of the company.Will you be successful in holding Powers responsible for the company's debts? Explain why or why not.Scenario 2 – Forms of Business OrganizationsNick and Mitch are partners in a successful lawn care business and are considering the possibilities of expansion. Mitch has been attending college to study accounting. Mitch would like to cut back on his landscaping responsibilities when he graduates to take on a full time job in accounting; however, he could manage the financial affairs of the partnership.Nick suggests that they hire Tracy to join the partnership because he is younger and could pick up the work Mitch was doing. Nick and Mitch currently operate as a general partnership. When the partners talk with Tracy, he suggests that he would like to become a full partner.How would you advise Nick and Mitch when they come to you for advice about the best type of business organization for their landscaping business? Explain your reasoning.Consider at least one limited liability option in your response, such as the LLC or LLP.Discussion Question Part IISelect any form of business organization studied this week and create a business that sells at least one tangible product, such as books or food, or provides a service, such as pet grooming or daycare. You will continue to build this business each week. In two to three paragraphs provide the following information about your business.Name of businessDescription the product or service and why it was selectedLocation of the principal office–must be in your stateType of organization (sole proprietorship, partnership, LLC, S corp, etc.) and why that form of organization was selectedAdvantages and disadvantages of the form of organization selectedLegal requirements for formation of the business in your state. Cite sources from the state, as applicable. Note: To learn how to properly cite a court case,click HERE2. Warranties and Accountant’s LiabilitiesBefore beginning work on this week's discussion forum, please review the link "Doing Discussion Questions Right," the expanded grading rubric for the forum and any specific instructions for this week's topic.The discussion assignment consists of two parts. Select one of the questions for Part 1 and answer Part 2.By the due date assigned, submit your answers to Part 1 and Part 2 to this Discussion Area. Post the answers to both parts in one thread. Label your answers Part 1 and Part 2, but do not repeat the scenario text in your responses. Start reviewing and responding to your classmates as early in the week as possible. You should review and critique the work of other students as outlined in the expanded rubric by the end of the week.Discussion Question Part ISelect one of the scenarios listed below and explain the best solution for each. Include comments related to any ethical issues that arise. You should locate at least one scholarly source from the SUO Library or one case that has been decided or is currently pending to support your answer. Scenario 1 - WarrantiesMichael, a mechanic, needs to install a 2,000-pound machine in his shop. The installation will require lifting the equipment to the second story. Michael goes to Home Depot and tells Brett, the manager, that he needs some heavy-duty chain to be used in his auto repair shop. Brett recommends a half-ton chain, which Michael purchases. Michael attached the chain around the piece of equipment and attempted to lift the equipment off the ground. Suddenly, the chain breaks. The equipment crashes to the ground and is severely damaged. Michael learned that he needed at least a one-ton chain for the job. Michael files a suit against Brett and Home Depot for breach of the implied warranty of fitness for a particular purpose.Will Michael be successful in his lawsuit? Explain the options and the likely outcome. Scenario 2 – Accountant’s LiabilityWalker, the CEO of Memphis Mini Golf and Go Carts (MMGGC), wanted to sell the business to Go Carts, Golf & Games. To provide a basis for the transaction, Walker retained Blanchard, an accountant, to conduct an audit of MMGGC. Blanchard was aware that Go Carts, Golf & Games would likely use the audit report in consideration of the purchase of the business from MMGGC. Blanchard's audit report showed that MMGGC’s business was profitable. William, Go Cart’s president, relied on this report in agreeing to purchase the business of MMGGC and in agreeing to the terms of the purchase. Sometime later, it was discovered that the accountant made a number of mistakes and that the business that was sold was actually insolvent. William and Go Carts sued Walker and Blanchard for damages. The suit claimed that the accountant had negligently misrepresented the facts.Discuss the arguments for each party, determine which party should win, and provide legal support for your decision. Discussion Question Part IIIn two to three paragraphs, provide the following information about the business you created in Week 1.Based on the type of product your business will offer, discuss potential product liability issues and how your company can avoid these potential risks. If your business only provides a service, pick a product your business will purchase and use it to answer this part.Explain the applicability of the UCC to your transactions and your plans to handle sales contracts and warranties. If your business provides a service, explain why the UCC will not apply.What is the difference between FOB Shipment and FOB Destination? Explain the advantages and disadvantages of each. Identify shipping term(s) you plan to use for your business and explain the selection.3.Negotiable InstrumentsBefore beginning work on this week's discussion forum, please review the link "Doing Discussion Questions Right," the expanded grading rubric for the forum and any specific instructions for this week's topic.The discussion assignment consists of two parts. Select one of the questions for Part 1 and answer Part 2.By the due date assigned, submit your answers to Part 1 and Part 2 to this Discussion Area. Post the answers to both parts in one thread. Label your answers Part 1 and Part 2, but do not repeat the scenario text in your responses. Start reviewing and responding to your classmates as early in the week as possible. You should review and critique the work of other students as outlined in the expanded rubric by the end of the week.Discussion Question Part 1Select one of the scenarios listed below and explain the best solution for each. Include comments related to any ethical issues that arise. You should locate at least one scholarly source from the SUO Library or one case that has been decided or is currently pending to support your answer. Scenario 1 - Liability on Negotiable InstrumentsPorter Cable hired a bookkeeper, Gerald Smith, and gave him general authority to issue company checks drawn on First Bank so Smith could pay employees’ wages and other company bills. Smith decided to cheat his employers out of $9,500 by issuing a check payable to Timkin Bearings, one of the suppliers of bearings. Smith does not intend for Timkin to receive any of the money, nor is Timkin entitled to the payment. Smith endorses the check in Timkin’s name and deposits the check in an account that he opened in Sunny Bank in the name “Timkin Bearing Co. Sunny Bank accepts the check and collects payment from the drawee bank, First Bank. First Bank charges Porter Cable’s account $9,500. Smith transfers $9,500 out of the Timkin account and closes it. Porter Cable discovers the fraud and demands that their account be re-credited.Evaluate the arguments for Porter Cable and the banks.Determine which party should win and support your answer. Provide arguments for each party. Determine which party will win. Provide support for the arguments and the final answer with cases or scholarly articles from the South University Online Library. Scenario 2 - Negotiable InstrumentsGinny DeWitt borrowed $30,000 from SunTrust Bank to pay for her first year of college and signed a promissory note that required payments to start six months after graduation or the student fails to enroll in at least one-half of the full time load. Ginny dropped out of college to pursue her passion of opening a gift shop. When Ginny failed to pay the debt, SunTrust transferred the note to First Bank in New York. New York Bank obtained a court order allowing it to garnish Ginny’s wages and her federal income tax refund. Ginny filed a lawsuit seeing to avoid the payment, claiming the debt was not valid because she did not sign any documentation promising to pay First Bank. She also argued that the note lacked consideration.Explain the holder or holder in due course status of SunTrust when the bank took the note from Ginny and then First Bank when it took the note from SunTrust.Address GInny’s arguments concerning the validity of the debt. Determine the outcome of the case and provide support for your answer. Scenario 3 - Holder in Due CourseJohn Haley hired Mary Black as a bookkeeper at Florida Dental Center, Inc. Haley fired Black when he learned that she embezzled more than $200,000 and did not pay over $150,000 in state and federal taxes owed by the business. Haley said that if Black did not repay the embezzled funds, he would notify law enforcement. Black started working as a bookkeeper for Senior Daycare, a business owned by her father. Without proper authorization, Black wrote a check to Florida Dental for $175,000 out of Senior Daycare’s account and deposited the check directly into Florida Dental’s checking account. Black told Haley that the funds were a loan from her family so she could repay Florida Dental. Haley used the funds to pay the back taxes owed. Two years later, Black’s father discovered her theft and sued both Haley and Florida Dental for conversion because Black did not have authority to take the funds.Evaluate Florida Dental’s status as a holder in due course (HDC) of the funds Mary repaid. Since Haley knew that Black previously embezzled funds from Florida Dental when she was an employee, should Haley have been suspicious about the source of the funds that Black used to repay the debt? Could this knowledge impact the court’s decision?Provide support for your answers.
