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    Business Operations, CPA Advice, Contacts, Liability, & More

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    You are a new associate at a CPA firm. Your boss has explained that a new client has come to the firm with a small but growing company that makes a granite cleaning product which is sold in several major retail stores. The client has been operating as a sole proprietorship, but now thinks that because of the growth of the company a different business entity might be advantageous. The client has also informed you that they have recently encountered a problem with their distributor. When the product arrived at the distributor's location, the distributor rejected the product, saying that they have received complaints from consumers that the spray bottles did not work correctly. The distributor further stated that the bottles sprayed the product in a dangerous way that caused injury to several consumers.

    Your boss has asked you to prepare a memorandum that you will present to your boss and the client that addresses the following:

    Recommend a new business entity to form the business and explains the advantages of the new entity;
    Outline the client on his or her new duties and liabilities as an owner/officer/ member of the new entity in regards with the newly selected entity;
    Discuss contract issues: Performance and breach of contract, remedies, risk of loss, and non-conforming goods in regards to your client's relationship with their distributor;
    Analyze the potential liability to consumers, under relevant laws and case law in regards to the production and distribution of the granite cleaner in a spray bottle.

    The paper

    Must be 10 to 15 double-spaced pages in length (not including title and references pages) and formatted according to APA style as outlined in the Ashford Writing Center.
    Must include a separate title page with the following:
    Title of paper
    Student's name
    Course name and number
    Instructor's name
    Date submitted
    Must use at least four scholarly sources in addition to the course text.
    Must document all sources in APA style as outlined in the Ashford Writing Center.
    Must include a separate references page that is formatted according to APA style as outlined in the Ashford Writing Center.

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    https://brainmass.com/business/business-law/business-operations-cpa-advice-contacts-liability-more-619113

    Solution Preview

    Memorandum
    Author / Student's Name
    School or Author Affiliation
    Course Name & Number
    Date Submitted

    Abstract
    As the new associate at a CPA firm, this memorandum is written for a client to addresses their small but growing company in the business of selling a granite cleaning product that's sold in major retail stores. The text discusses how the former sole proprietorship should be changed to a different business entity because of company growth. The subjects of responsibility, duty, and liability are explored in regards to distribution. Plus, contracts, risk management, and more are analyzed to ensure the success of all operations.

    Paper Title

    Recommend a new business entity to form
    * The Recommendation: LLC - Limited Liability Company
    http://www.nolo.com/legal-encyclopedia/limited-liability-company

    https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Limited-Liability-Company-LLC

    * Explain advantages of the new entity
    According to an attorney at Nolo, "A limited liability company (LLC) offers protection from personal liability for business debts, just like a corporation. However, unlike a corporation, which must pay its own taxes, an LLC is a pass-through tax entity: The profits and losses of the business pass through to its owners, who report them on their personal tax returns just as they would if they owned a partnership or sole proprietorship. Moreover, while setting up an LLC is more difficult than creating a partnership or sole proprietorship, running one is significantly easier than running a corporation."

    See the main features of an LLC: http://www.nolo.com/legal-encyclopedia/llc-basics-30163.html

    * Outline the client on his or her new duties and liabilities as an owner/officer/member of the new entity in regards with the newly selected entity

    A sole proprietor is very different from an LLC, and in general, one must think like a corporation, and conduct business separately as other organizations perform. For example, Clorox - the makers of bleach and other cleaning products; how do they operate? What is their mission and brand message and how can their strategy ...

    Solution Summary

    Solution addresses a response to the following case study: You are a new associate at a CPA firm. Your boss has explained that a new client has come to the firm with a small but growing company that makes a granite cleaning product which is sold in several major retail stores. The client has been operating as a sole proprietorship, but now thinks that because of the growth of the company a different business entity might be advantageous. The client has also informed you that they have recently encountered a problem with their distributor. When the product arrived at the distributor's location, the distributor rejected the product, saying that they have received complaints from consumers that the spray bottles did not work correctly. The distributor further stated that the bottles sprayed the product in a dangerous way that caused injury to several consumers.
    Your boss has asked you to prepare a memorandum that you will present to your boss and the client that addresses the following:
    Recommend a new business entity to form the business and explains the advantages of the new entity;
    Outline the client on his or her new duties and liabilities as an owner/officer/ member of the new entity in regards with the newly selected entity;
    Discuss contract issues: Performance and breach of contract, remedies, risk of loss, and non-conforming goods in regards to your client's relationship with their distributor.
    Analyze the potential liability to consumers, under relevant laws and case law in regards to the production and distribution of the granite cleaner in a spray bottle.
    The paper
    Must be 10 to 15 double-spaced pages in length (not including title and references pages) and formatted according to APA style as outlined in the Ashford Writing Center.

    $2.19