Explore BrainMass
Share

Legal and Ethical Challenges in Business Organizations

This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

I am stuck and really need some help getting this paper completed. Please let me know if the bid is sufficeient enough for this level of work. Thanks

The following is an overview:
Read the scenarios and the questions that follow. Identify and analyze the legal issue(s). Apply legal concepts and make potential arguments as directed using laws, cases, examples, and/or other relevant materials. Consider using short headings (consult APA materials) to separate the topics. Summarize the facts; do not copy the scenarios into the paper. After you have answered the questions and before the conclusion, propose recommendations to help the organization avoid at least five of the issues identified in the scenarios in the future. Support your answers with information from the textbook and at least five scholarly sources other than the text and course lectures. Prepare a 8- to 12-page paper that identifies the legal issues and potential solutions and answers all questions presented, supported by relevant legal authority.
Overview
Famous Subs and Pizza Company (FSPC) is a publicly traded corporation headquartered in Tallahassee, Florida, operating restaurants in ten states. The company also owns a food processing and distribution facility in Jackson, Mississippi. Approximately 20% of the employees work full time; however, FSPC primarily hires part-time employees as delivery drivers, cooks, and sandwich makers. FSPC leases space for most of its restaurants in shopping centers, but the company owns a few of the properties as well as its headquarters office and the distribution facility. The company experienced explosive growth over the last three years, but with the growth came increased legal issues. The CEO, Chip Stone, seeks your advice on the following legal and ethical issues.
S1: Business Organizations
Charmaine, Delia, and Mary met while working for FSPC in Atlanta, Georgia. Charmaine was attending college to earn a degree in management. Delia was attending culinary school to become a chef, and Mary was a recent graduate in sales and marketing. The three ladies decided to open their own sandwich restaurant on wheels, also known as a food truck. They planned to start small with one truck but had big dreams to own a whole fleet of trucks that served a variety of foods.
Charmaine took a business law class and remembers there are several forms for organizing businesses. The ladies have come to you for advice about the various forms  of business organizations.
• Analyze three forms of business organizations including advantages and disadvantages related to the business the ladies plan to operate.
• Defend selection of one of the three types of business form for the new business, including the requirements for starting that form of business in your state.
S2: Intellectual Property
In addition to the confidentiality and noncompete provisions, the employee handbook also contained a section about intellectual property. Employees are required to disclose any inventions made during the period of employment that are related to the company's business. Devlin created a new app that will make it easier for customers to order food for delivery or takeout. The app provides additional access for blind and deaf customers so that they can also place orders by using the app. Devlin searched the patent applications and did not find any other patent that was similar to his new food-ordering app and intends to file for protection of his patent as soon as possible.
• Evaluate the arguments for FSPC and Devlin concerning ownership of the invention under the following assumptions:
o Devlin did not use any company resources, including time, to create the app.
o Devlin used some company time and a computer to develop the app.
S3: Securities
On June 30, 2015, FSPC predicted first-quarter earnings of $0.25 per share. On July 13, 2015, FSPC received an e-mail from their in-house attorney related to a $2.5 million claim for personal injury of a three-year-old child who was allegedly injured when choking on a toy contained in a kid's meal sold by one of the FSPC restaurants. Chip Stone, the CEO of FSPC, instructed the attorney to prepare a press release describing the claim. Before the press release was sent to the copy center at FSPC's executive office, the vice president of sales sold his FSPC shares at the prevailing market price of $35.25 per share.
Charlene Copier, who ran the photocopying machine at FSPC's executive office, saw the draft press release. She called her broker, Bradley Broker; told him about the press release; and ordered him to sell the 250 shares of FSPC that she had acquired in FSPC's initial public offering. Broker then called his best client, Calvin Client, and suggested that he sell his 10,000 shares of FSPC's stock but did not tell him why. Client agreed, and Broker sold Copier's and Client's stock at $35.25 a share right before the market closed on July 15.
The press release was publicly announced and was reported on the Business Wire after the market closed on July 15. The next day, FSPC's stock opened at $27.75 per share. Plaintiffs have brought a private class action suit, and the SEC has commenced enforcement proceedings. Criminal prosecution is threatened by the US Attorney's Office:
• Evaluate the potential claims by the plaintiffs in the class action lawsuit and the basis for the criminal action by the US Attorney's Office.
• Assess the potential liability for securities violations of Stone, the vice president, Copier, Broker, and Client.
S4: Bankruptcy and Secured Transactions
Coastal Property Restoration (CPR) periodically purchased used restaurant equipment from Famous Subs and Pizza Company. CPR refurbishes and sells restaurant equipment to small restaurants. In December 2014, CPR purchased five used pizza ovens for $50,000. Because of the good relationship between the companies, FSPC financed the ovens for two years; however, FSPC did not obtain a perfected security interest in the ovens. In July 2015, CRR sold four of the ovens to another refurbishing company for $4,000 two days before filing bankruptcy. CRR still owes approximately $35,000 to FSPC for the ovens.
• Evaluate the legal and ethical issues associated with CRR's sale of the pizza ovens before filing bankruptcy. What recourse does FSPC have in recovering the monies still owed on the equipment or the remaining oven?
S5: Physical Access and Public Accommodation
Individuals may place orders for pizza by phone or fax or through the FSPC website. The FSPC website does not contain features that allow a blind person full access, such as the ability to order online. The National Federation of the Blind has filed suit on behalf of a group of blind individuals.
• Evaluate the basis on which lawsuits might be filed on behalf of blind individuals and propose a potential outcome supported by cases or scholarly sources.
S6: Bribery and Facilitation Fees
FSPC purchased two packaging machines for the distribution center and ten pizza ovens from a supplier in Italy. Between the shipping costs, delays, and unanticipated duties, the purchasing manager was worried that his boss would be upset about the total costs. In an effort to reduce costs, the manager offered a US Customs officer $500 in cash to re-classify the imported goods to reduce the amount of duties owed.
• Analyze the legal and ethical ramifications of the purchasing manager's offer to the customs official?
• Would it make a difference if the purchasing manager offered to donate $500 to St. Jude Children's Research Hospital if the officer expedited the paperwork necessary to release the goods from custom's custody?
S7: Recommendations
As the new Director of Compliance, you have reviewed each of the issues presented. The CEO, Chip Stone, requested that you propose specific recommendations on how to avoid both legal and ethical issues in the future related to a minimum of five areas that need improvement. Be specific and detailed and be sure to base recommendations on relevant legal and ethical principles. Do not provide generic resolutions such as "the company should provide training and implement procedures to avoid future problems."

© BrainMass Inc. brainmass.com March 22, 2019, 3:36 am ad1c9bdddf
https://brainmass.com/law/contractlaw/legal-ethical-challenges-business-organizations-623120

Solution Preview

This is the requested assistance.

S1: Business Organizations
Charmaine, Delia, and Mary met while working for FSPC in Atlanta, Georgia. Charmaine was attending college to earn a degree in management. Delia was attending culinary school to become a chef, and Mary was a recent graduate in sales and marketing. The three ladies decided to open their own sandwich restaurant on wheels, also known as a food truck. They planned to start small with one truck but had big dreams to own a whole fleet of trucks that served a variety of foods.
Charmaine took a business law class and remembers there are several forms for organizing businesses. The ladies have come to you for advice about the various forms of business organizations.
• Analyze three forms of business organizations including advantages and disadvantages related to the business the ladies plan to operate.

Three forms of different organizational structures that the women can choose from include sole proprietorships, partnerships, and corporations. In reference to the sole proprietorship, this is one recommended business model for these women because it affords the women the autonomy to maintain control over their small business, which is one food truck that they currently own. The sole proprietorship is the simplest form of business organization but there are inherent dangers associated with this particular model of business. Because the owner has exclusive and unlimited liability for any actions that occur as a result of the business, a business owner could easily go bankrupt if they are sued.

Some of the advantages associated with sole proprietorships entail the ability to inexpensively establish the business, control over all business decisions by the owner, and the ability to retain all profits made by the business. There are fewer regulations to abide by as well, and the business can take advantages of the lesser taxes that occur for these businesses wherein income that is the personal income of the owner is not taxed. As I alluded to earlier, owners are responsible for 100% of their actions and obligations, and raising capital for sole proprietorships is challenging and difficult.

Because there are three owners for the business, the most effective approach in this scenario would be to form a partnership, which is representative of at least two individuals who own and manage a business together while also being responsible for all liabilities and expenses associated with the business. The business partners should choose to engage in limited liability partnership wherein they all have limited liability associated with any debts accrued. There are many advantages for opening a partnership as it is not difficult to form a partnership and raising capital for the partnership is considerably easier than for a sole proprietorship. In addition, no corporate income tax fees are applied and all profits are shared amongst the owners.

Some of the disadvantages associated with partnerships entail the requirement to agree on decisions, which could result in conflict between owners and dissolution of the business if there is a contrast of leadership styles. The other disadvantages associated with partnerships entail joint responsibility for all liabilities and business obligations.

The final business organization that will be discussed for this summary is a corporation, which is characterized by a company that has multiple shareholders, a board of directors, and is incorporated. This type of company is for large organizations, and because the three women are just beginning their organization, it would not be appropriate for them to establish this type of organization despite the advantages that could be attained. Some of the advantages associated with a corporation include the ability to raise funds by selling stock and the fact that liability is limited for individual owners as they are only liable to the extent of the value of stock they hold within the organization.

Disadvantages associated with owning a corporation are that many regulations must be abided by in contrast to the loosely regulated partnership and sole proprietorship. There is more to pay in taxes because of the corporate tax rate, and the organization can't deduct dividends paid to shareholders by including them in corporate income, which results in the ...

Solution Summary

The legal and ethical challenges in business organizations are examined.

$2.19