Choose a legal form for your business
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Scenario:
You have decided to develop a business that concentrates on importing fair-trade world goods for sale in retail mall outlets in several different American cities (Detroit, Philadelphia, Seattle, Las Vegas, Atlanta, and Dallas). The theme you have selected is, "A Small World." Because of the nature of this business, you will need to investigate world economic trends and theories, as your products will come from many different countries and cultures. Your product line will be primarily décor items, some small furniture, small gifts, and bric-a-brac items. The stores will be relatively small (about 4,500 square feet) and packed with items, so that there is a lot for potential customers to see and touch. You will also offer free coffee samples for shoppers (and may also decide to sell some), but coffee will likely be your only consumable product. The outlet stores will follow regular mall hours and because of the parking provided at the malls, parking should not be an issue.
The malls usually have high foot-traffic, so the potential for a lot of impulse buyers is high. This is good, because you will likely have little money for advertising. You are unsure about product mix and about the range of products. You have also thought about adding a sales Web site and perhaps selling home décor products to other retailers, such as Target, J.C. Penney, and Sears.
Based on the above scenario:
1. Choose a legal form for your business and provide your rationale for choosing the legal form and rejecting the other possibilities. Remember to show a solid understanding of the legal issues here.
2. Address any trademarks, copyrights, and other legal issues.
3. Write a mission statement and organizational objectives.
4. Provide the responsibilities and titles of top management.
5. Outline the basic idea as to how the management structure will be interrelated (for example, who will work for whom, and what will those relationships entail?)
6. List company products or services.
7. Describe how the company's mission, objectives, and products are strategically integrated.
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Solution Summary
1. Choose a legal form for your business and provide your rationale for choosing the legal form and rejecting the other possibilities. Remember to show a solid understanding of the legal issues here.
Solution Preview
The legal form selected for this business is limited liability corporation. The primary reason for selecting this form is that it will protect the owner from personal liability, as well as provide some of the benefits of being a corporation without the high costs associated with corporation. Partnerships and sole proprietorship are not suggested because there are not partners and owner does not want to have personal liability on the business. Further, LLC will provide fund raising options by converting it into a corporation.
The main legal issues that the company need to pay attention to include legal issues associated with incorporation or formation of the business, taxation and accounting related laws and regulations associated with the chosen firm. Further, the company will need to obtain requisite licenses to operate this import business. The company will also need to adhere to laws pertaining to human resources. Further, the brand or business name needs to be protected by trademark. For the web business, the content or material on the ...
Education
- BCom, SGTB Khalsa College, University of Delhi
- MBA, Rochester Institute of Technology
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