For Linda-Harris Only

Michael Mansfeldian opened his “Robot Factory—Where You Make Your Own Robot” business in April. Six months later a city inspector walked in to see if the business was licensed. The inspector found no license displayed. In fact, Michael had not bothered to obtain one. What will likely happen to Michael and his business as a consequence? Why do cities require licenses? (You answer should be at least 5-7 sentences.)

How would you react if your partner, acting on behalf of the business, borrowed a large sum of money from the bank without first discussing it with you? Are you liable for the loan? (You answer should be at least 5-7 sentences.)

Susan is having a hard time deciding between starting a sole proprietorship or a partnership. She likes making her own decisions, but would like to have some of her friends join her in the venture to help kick around ideas. She would like them to also share in the profits and major decisions to make sure everyone is fully committed to the new enterprise. However, she realizes that her co-owners might not only be liable for the obligations of the firm, but they might also be in a position to wreck the business with bad decisions. Present a case to Susan with the advantages of a partnership over a sole proprietorship including any legal doctrines that could protect her in the situation of bad behavior from a partner. (You answer should be at least 5-7 sentences.)