Business Entities, Laws and Regulations Term Paper

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Felipe's inability to speak English would be a liability to the company and a possible safety threat, so he should not be hired as well. That leaves Eric and Michelle, who are both qualified candidates and could therefore both be hired. Even though Eric does not have a high school diploma, his life experience should make up for the lack of education, and he knows how to work a jackhammer. Michelle is perfectly qualified, and cannot be turned down solely because of her (supposed) pregnancy, and is therefore the top choice according to the criteria. However, if either of their interviews provided a legitimate reason to why they would not be able to work, they would not have to be hired.

As a provider for Stonecraft Builders, Paul would do well to incorporate his proprietorship into a corporation. The process would take some time: he would need to file the Articles of Incorporation with his state's official office and would need to come up with a registered corporate name. As part of the name, he would also need to decide what sort of entity he would want his new business to be -- if he was planning on passing over the reigns, a Limited Liability Company would likely be the best choice. If he is unable to find a buyer when he wants to retire, and chooses instead to liquidate his business, he will have to value all of the assets that the company holds and then sell them off, and return his supplies and inventory back to their suppliers.

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Once he incorporates, Paul will have to follow Generally Accepted Accounting Principles (GAAP), one of which is matching revenues and expenses. If the employee is falsely claiming sales of one item while providing another, the numbers won't match up on the balance sheet, and Paul could be found guilty of accounting, as well as consumer, fraud. He should find a way to cease the employee's actions immediately, either through discipline or firing. If the cheap marble leads to a lawsuit, Paul himself could be on the hook for the settlement if his company stays as a sole proprietorship, for it is not a separate entity. If he turns his company into an LLC, he will have limited liability, and is thus better-protected from losing his personal funds if the company is sued ("IS Sole Proprietorship," 2008).

Evidently, forming, managing and transferring a company is not an easy task, and these scenarios help to appreciate the legalities of corporations. By choosing the right kind of entity, practising proper hiring standards and following GAAP, businesspeople can help their corporations succeed and stay out of legal problems......

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