The company that I have selected is Cargill. Cargill, Inc. is one of the privately-
owned American global food corporations that is situated in Minnetonka, Minnesota.
It is a global provider of agricultural, food, and industrial products and services.
The legal entity that Cargill can be categorized as is a sole proprietorship.
There are a number of benefits of the sole proprietorship. One of the major benefits
is that forming such a business structure is inexpensive and easy. The establishment
of this business structure requires minimal cost, and the legal costs are only limited
to obtaining the essential permits and licenses. As the sole proprietors are the only
owners of the entire business, it provides the owners with complete control over the
decision-making process of the business (Sole proprietorships: What you need to
know. Sole Proprietorships: What You Need to Know | Startups.com, 2021). For
instance, the sole proprietors, do not have to wait for the decision of any partners
to make any changes to their working policy. Instead, the decision can be made
instantly. Flexibility and tax deductions are also other benefits of the sole
proprietorship.
In spite of numerous benefits, the sole proprietorship also has some disadvantages.
One of the drawbacks is that raising capital can be difficult. For instance, banks
and investors are very reluctant to lend capital to the sole proprietors owing to the
increased risk of business failure.
zz Rj Corman is a LLC. It's a railroad group that owns a couple short lines and
other companies that all are related to the railroad industry. RJ Corman is widely
known for their derailment services and of course that everything RJ Corman is
bright red. They are both advantages and disadvantages of RJ Corman LLC.
Disadvantages of a LLC would be the fees, the taxes and the amount of work
that can come with maintaining a LLC. While the limited liability is great it has
its negatives which majorly evolve around the maintenance and cost of owning
such. company.
The advantages would be of course its limited liability, the structure can be pretty
flexible, they are not a whole lot of ownership restrictions, also he taxes can be
flexible on how they choose to do them. Lastly, it's easier to make a profit with
a LLC, because of the way they are set up you can allocate the profits/losses in
a better way.
In addition to the concept of piercing the corporate veil, which is mentioned in
the assigned reading, there is also an infrequently encountered concept called
reverse piercing of the corporate veil.
Piercing of the veil occurs when a court allows parties suing a corporation to sue
the owners of the corporation in addition to suing the corporation itself. That sort
of thing is allowed if the owners have used the corporate entity to engage in
some sort of abuse or have somehow acted in a way that blurs the distinction
between the corporation and its owners.
Reverse piercing of the corporate veil allows litigants to sue not only a
corporation but also subsidiaries of the corporation in order to collect on a
judgment if the owners of the corporations have somehow engaged in financial
misconduct that had the effect of shifting assets from the sued corporation to its
subsidiaries in order to prevent the plaintiffs from collecting on a judgment.
At least two states, Virginia and Delaware, allow the so-called reverse veil-piercing
I decided to focus on the Macys retail brand. Macy's is a well-known retail
corporation and an omnichannel retailer; meaning that the company profits off of
multiple retail markets to buy and sell all types of department goods. The home
base is located in Cincinnati Ohio and there are 819 companies within the brand
of Macy's itself. The department store sells a multitude of products from clothes,
make-up, shoes, and perfume, to kitchenware, Auto services, and lawn care
equipment.
The pros and cons of this corporation:
Pros
• Owners are exempt from legal accountability, thus they aren't solely
accountable in the event of legal problems or debt.
• A corporation has the ability to sell stock increases the chances of
obtaining capital.
• A well-established business with roles and positions and different structures
within the same company.
Cons
• Yes, the company may be founded by one person however a corporation
means that multiple people ( board of directors) govern the decisions made
for the company.
• This type of corporation receives double taxation, meaning that the company
itself must pay taxes, and from there the shareholders must also pay.
A general partnership is probably not a very attractive form of business entity for
doing business in the long run, especially since the LLC has become available as
a form of business entity in recent decades. One of the businesses that I am
familiar with is Amazon. I think I use Amazon in some capacity every day or
for sure weekly. Amazon prime is my favorite site to order from online and also
love the other features such as the
television service and music. The Amazon business is titled as an incorporation
which fits under the corporation category. An incorporation is defined as (2022)
“the process of constituting a company, city, or other organization as a legal
corporation.”
Amazon is large company with several different services such as online shopping,
television channel, music, pay features and more. I recall years ago people started
to invest in amazon and now today the shares for that company gone up more
than ten times their value 20 years ago. Now today Amazon has grown to be
known across the country and the entire world. zz
Some advantages of a corporation are that (2022) “…shareholders of a corporation
are only liable up to the amount of their investments.” Also, it is “easier for
shareholders to sell shares of a corporation.” (2022) “There is no limit to the life
of the company.”
A disadvantage is double taxation (2022). So, the corporation (2022) “may have
to pay taxes after the shareholders have already paid depending on the type of
corporation.” (What are the disadvantages of a Corporation?)
An example of an advantage is when people buy stock in Amazon. That person
becomes a shareholder of the company. The shareholder earns a profit from the
stock they can sell their stock and earn the profit. The example of the
disadvantage is that they will pay taxes and so will the amazon corporation. There
is an interesting article at upcounsel.com “Can One Person Own An LLC:
Everything You Need to Know.” One person can own an LLC but the Internal
Revenue Service (IRS) probably will not allow it to be treated as a separate
entity for purposes of income tax. Also, with one person owning an LLC, it may
be easier than otherwise for someone to persuade a court to “pierce the veil” in a
lawsuit.
The business I chose to write about this week is my previous employer. They
are a Senior Living community by the name of Brookdale. They are an
incorporated business which has facilities all over the United States that cares for
the aging population. The benefits I can see to running a senior living facility as
an incorporation is that it is set apart legally from the people who started the
business. This would be a benefit because a Assisted living can have many legal
battles ahead of it. Some times they do not hire they best employees which can
lead you to become liable for someone else negligence. It is important for the
people who founded the business not take on sole responsibility for the actions
one of the employees caused. The disadvantage of having a corporation is the
double taxation on the profits that corporation makes. I see this as a disadvantage
because who likes being double taxed on profits they made. It takes a lot to run
any business but having a corporation would be a bigger struggle I think. A sole
proprietor can hire employees if he or she wants to, and the business could
remain a sole proprietorship. But if one has employees, one might want to form
an LLC for some protection against liability, beyond whatever protection one's
insurance, if any, might provide. In some states the fees for forming and
maintaining an LLC are reasonable, but in some states the fees might be excessive
for a small business. The business I chose to discuss for this week's topic is a
business in my hometown called Bad Boy Mowers. I was employed there years
ago and still support them to this day. Their legal name is Bad Boy Inc. which
means their company's business structure is a legal corporation and is also a
separate legal entity from the ones who formed the company.
The formation of Bad Boy began in 1998 in a man's garage in a very small
town (population of 81to be exact) in rural Arkansas. Their first commercial grade
zero turn lawn mower was finally revealed in 2002. The company began
production with about 20 employees and currently employ over 700. They now
have ten different types of commercial and residential zero turn mowers, a stand
on mower, walk behind mower as well as a push mower. Bad Boy has now also
added a span of six tractors to their options of their products.
Some advantages of Bad Boy are the way they have patented designs of American
made products. They have branded the product well. Their motto of "Mow with
an Attitude" has been second to none with their phenomenal marketing department.
They have been able to gain national exposure over the years with events such as
NASCAR sponsorships, PBR bull riding, hiring a spokesman from Monster garage,
endorsed by Willie Nelson, Toby Keith, Zac Brown, and Merle Haggard, becoming
the official mower of Sea World and Bush Gardens, sponsoring an NCAAA
college basketball tournament called Battle for Atlantis as well as an ESPN college
football bowl game named Gasparilla Bowl.
Disadvantages for Bad Boy are that they do compete with some much larger
companies with similar products. Until two years ago they were privately owned
which hindered their ability to grow much larger than they were. They do have
supply chain issues that are beyond their control along with most other companies
right now. The business that I chose for the discussion is ACE Hardware. As a
kid my mom talked about her grandfather owning an ACE. Through my life I
have shopped there and have wondered what types of relationships the franchise
owners have.
ACE Hardware was started in 1924 and became a corporation in 1931, it is
currently the worlds largest retail hardware cooperative with over 5,000 locations
internationally. ACE Hardware brings in around 8 billion in customer level sales.
Many of the locations are independently owned by locals. The company has a
successful sales and marketing strategy as well as an affiliate program.
Some advantages to ACE Hardware being a corporation are Inclusion. An example of
inclusion would be ACE Hardware offering Retail Training programs to new owners.
Branding, sales, marketing, and access to capital are also advantages. ACE Hardware also
has different options for being a part of the franchise, including converting an existing
store, opening a new location, and adding an ACE Hardware to an existing grocery store.
Some disadvantages are not having a stable market in every location and less control
over sales and pricing. Dexter’s Deli (“Dexter’s”) is a local pet store that specializes
in healthy food for dogs and cats, including fresh, raw, freeze-dried, and other
high quality food and natural supplements. The staff is trained to educate
customers on different selections of nutritional options, which include remarkable
choices like, goat milk, CBD (for animals), and pupcakes, for those special doggo
birthday ragers.
Additionally, they offer accessories, toys, and other products, as well as services,
like monthly anesthesia-free dental cleanings for your barker or meower.
Dexter’s is licensed as a general corporation in the state of California, and
currently has three stores in San Diego county.
ADVANTAGES of being a Corporation in CA:
• Separate legal entity – this shields the shareholders from the company’s
liable actions or debt.
• Capital may be raised by selling stocks – to help with business costs.
• “California offers a number of tax credits to corporations to help them
grow” (Mohsen Parsa Law).
DISADVANTAGES of being a Corporation in CA:
• Required to maintain separate books and records – keeps financials separate
from personal liabilities.
• Required to hold shareholder and board meetings – and answer to the
Board.
• Double taxation – taxes paid by the corporation and the shareholders.
I learned the difference between two separate business entities, which are LLC and
INC. When I did my search, I found two companies built upon different legal
structures, but with similar types of services in which they offer. One company is
Arellano Associates, LLC and the other TRC Companies, INC. These are two
respective companies who offer professional services to public, private, and
government clientele in forms of public outreach and communications through
technology.The main purpose of LLC is to protect its members from any legal
liability for business obligations. The main advantages of LLC is that it offers an
easier route in creating the business than that of a corporation. A LLC is under
the jurisdiction of the state in which it is filed under, and has the benefit of tax
flexibility, wherein they can choose how they are taxed. The LLC further has the
flexibility of creating an agreement in which it defines the roles and
responsibilities of its member, or if no agreement is made, then it can default to
the state statutes.Some disadvantages of LLC include inconsistencies with rules and
regulations due to the fact that LLC operates under state statures. Differences from
state to state draws a major disadvantage to any LLC that operates in multiples
states. Another disadvantage in LLC, is that it can become an easy target of
dissolution for a multitude of reasons like failure to meet its obligations, change
within its structure, violating terms with expiration dates and many tax reasons.
Any of these issues can expose the members of any LLC to a high risk of
dissolution. I would like to talk about a business called Total Solutions. This
company is a sole proprietorship business that provides service of dealing with
legal document preparation, which is filed with the court, because they have a
bond up to 25,000 which is filed with the city and state, also have certification
of legal work, for example Associate of Science in paralegal studies, or if you
work under an Attorney, you are a paralegal not a Legal Document Assistant
(LDA). Any one can become a LDA if you have the qualification, or you can
even buy this business if interested in. You just need money like other people
who purchase a franchise they you become a co-operator.
The disadvantage of LDA is you must be certified on your own, which means
you need to go to a credible school, as well as get bonded by an insurance
company. LDA are not licensed to give legal advice but can provide work done
to another attorney. The advantage of being a LDA you can put your price on
your work, make your own hours and work from home if you like not even to
go into office if you don’t feel like it, let your secretary handle the office only
go in when dealing with clients.
In my words a LDA is a paralegal or were until January 1, 2000. Since then,
paralegals have become LDA not paralegals that is because LDA were taking
work from attorneys. So, with that in mind attorney found a way to charge a sole
proprietor to still work as a legal document assistant if they pay. Its not cheap.
This is required to be renewed every three years. In other words, LDA does all
the work an attorney does just can not represent you in court nor can they give
legal advice, but a LDA can charge just like an attorney, but they don’t because
they are there to help the people who cant afford an attorney.
A lawsuit against a corporation is not a lawsuit against the shareholders. For
example, if you buy stock in Ford Motor Company, you as an individual will not
be sued if somebody sues the corporation.
The exception where a shareholder is brought into a suit against a corporation can
occur if the shareholder has behaved in an improper way that blurred the
distinction between the individual and the corporation. That is more likely to
happen if an individual is a major shareholder in a corporation with relatively few
shareholders. Wegmans Food Markets, Inc., is a corporation, with its headquarters
in Rochester, New York. Founded in 1916, Wegmans is one of the largest private
companies in the United States. It belongs to members of the family of its
founder, John Wegman. It owns about 105 supermarkets, which are much larger
than most supermarkets. (Wegmans, 2022). They are usually located in relatively
suburban locations.Since the stock is not publicly traded, the company does not
have to issue the sort of financial reports to the public that a publicly traded
corporation would have to issue. An advantage of the corporate structure is that
the individual owners of the company’s stock are not personally liable for debts of
the corporation. Also, since the stock is not publicly traded, the owners and the
company enjoy a certain degree of privacy. It might be seen as a disadvantage
that the company cannot, as it is presently structured, easily raise money by a
public issuance of stock, but the company is probably in such a good financial
position that it would not need to go that route. The first job that I ever had as
a teenager was at Chick-fil-a. I chose this company because for the longest time I
had no idea the type of legal entity that it was, and once I did, consideration
was given to joining their team of Operator's. Chick-fil-a is a Franchise legal
entity that is referred to as a quick service restaurant (QSR). It would more
specifically be considered a chain style franchise company. It is privately owned
by a franchisor that allows those that are selected to Operator's of Chick-fil-a
stores throughout the country. These Operators are franchisee's that pay a joining
fee currently of $10,000 to run there own store. There are advantages and
disadvantages to this setup for the franchisee. A big advantage is the ability to
join an already build and successful business model to a their foundation on
immediately starting out. The organization provides training, guidance, land, and
construction. While this level of stability is great to have just starting out, it does
come at a cost in excess of the initial $10,000. As stated on the website, the
franchisee must also pay for 15% of sales in addition to 50% of pre-tax profit
remaining. Needless to say that this business model offers great advantage to the
franchisor as the monthly fees that come once the franchisee's store is up and
operational can be significant.
The business I selected today is the Special Financing Company LLC. This
business is a limited liability company. Which means it protects all the personal
assets if something were to happen with the company. An easier way to remember
is that LLC’s Is the line between personal assets and business assets. I think this
a smart move for the Special Financing Company because they are lender. They
supply loans and financial services to companies. When a company or dealer has
a client that cannot pay for their services they apply for a loan. Special Financing
funds that dealer the entirety of the loan and the clients pays Special Financing
back.
The Special Financing Company has limited liability when it comes to anything
happening to the company. The owner does not have to worry that if the
company fails they will have to lose their assets. Say the business goes bankrupt
the owner will not have to worry about his house or his car. The LLC is also
beneficial with taxes. The profits of the business go to its members without being
taxed by the government on the companies side.
I very big disadvantage to having an LLC is that if one of the managing partners
or owners leave the company will have to be dissolved. The remaining members
will have to take on all legal and financial obligations to end the business. If one
member leaves they would have to start the business over from the ground up.
In Hawaii, small businesses structures have been popular for hundreds of years and have
become essential to our economy. Amongst these small businesses is Mahina Made
Hawaii. Mahina Made Hawaii specializes in designing and selling merchandise that is
inspired by the Native Hawaiian language and art. This entity is legally considered as a
small business structure and is considered to be under a sole proprietorship as it owned
and managed by one individual. Local business licensing is needed however, government
approval and documentation is not .Advantages of being a sole proprietor of a small
business structure include flexibility in the sense that they do not need to answer to
partners or executives. This means that the owner of the business could create content,
produce, market, and sell products whenever she chooses to do so because she would
not have to get the approval from other business executives of the company. Advantages
also include easy transfer or termination of proprietorship, and simplification of
personal/business taxes. If the owner were to decide one day that she wanted to pass
her business to a family member or simply retire, the transfer process would be simple
and filing taxes as a sole proprietor only means paying personal taxes. Disadvantages
however include full responsibility and liability of the business and its finances, as well
as the sole proprietor's personal assets if used for personal funding. This means that the
owner would assume 100 percent of liability if something were to go wrong with the
business or if the business does poorly. Also, if the owner were to use her own
personal assets such as her home as collateral for personal funding for her business,
those assets would be affected as well . Most people do not know that Amazon.com is
an Inc and LLC. Amazon.com LLC is a subsidiary of Amazon.com Inc. “This giant
corporation utilizes an LLC structure to optimize its tax strategies”.Amazon.com LLC has
many created subsidiaries like AMB that provides facility cleaning solutions to various
businesses including Amazon.com LLC and Inc. buildings. Exemplary tax strategies
indeed.Amazon.com Inc. has exponential capitalization profit margins of more than $268
billion in the United States. Amazon.com LLC is an online retailer and business reseller
for individuals and other businesses to sell their items and display Amazon.com products
sale. Amazon.com, e-commerce global dominance is achieved by being a manufacturer of
electronic book readers, Web services provider, and selling anything and everything by
means of websites.There are advantages and disadvantages of Amazon.com LLC (Inc.)
business. The #1 advantage that Amazon.com has is its branding. Amazon.com has
become a trusted online retailer. They have an easy way to return items for unsatisfied
purchases or deliveries. No receipts are required because the orders are in a member’s
profile, and tracking is made easy. Amazon.com has large capital to be able to invest in
societies globally helping to give back to the communities they operate with. The main
disadvantage, I would like to discuss briefly is that Amazon.com is a business that solely
operates from websites and the internet to generate profits. If the internet (where does
the internet come from?) was not able to access for many global reasons this company
would plummet into a volcano of destruction. I am sure Amazon.com has a master plan
and inventive ways of probably offering their own internet wi-fi hot spots that can
emanate from their warehouse fulfilment distribution centres. An example of this would
be certain centres have hydropower specifically to charge their pit crew machinery. To
the future and beyond. I previously worked for a law firm that had started out as
a partnership between two attorneys. Within this law firm, they had other attorneys
employed as well as the office staff. Throughout the life span of the firm one of
the owners no longer practiced law but kept his interest in the firm. As I did the
bookkeeping I learned this partner still received a paycheck from the attorney that
was working since his name was still titled to the firm. As time went on it was
apparent the attorney that still was practicing was responsible for making all ends
meet. Eventually, the attorney that was still practicing passed away unexpectedly.
We that were working for the firm at the time had to make some adjustments.
One of the attorneys that were working under this firm was owed a lot of money
from the attorney that passed away. The partner that was alive had to be bought
out now should they wish to keep the firm going but with circumstances of
changing the name and removing his. The attorney that was owed money received
the firm for payment from the family of the deceased attorney, however, he had
to agree to buy out the other attorney as well. Now I do believe if this firm was
a corporation or sole proprietorship things would of went a completely different
direction once the attorney passed away. When you have a corporation and
someone passes the next chain in command usually takes over and operations can
continue as normal. I am actually the owner of a sole proprietorship, but my
business is very small. I have all the measures like paying taxes, have insurance
and have a company name to name a few. I decided to stay small due to me
already having a full time job for the time being while I finish school. the
advantages of it is that I am able to make my own decisions about my company
and can control the income. For example, when I knew that my advertising
needed to be picked up due to me needing more income I was able to make the
changes without having to meet with anybody about budgets or which company I
would hire for my advertising. One of the disadvantages would have to be the
liability and that is what scares me the most which I choose to stay small. While
one day I might choose to go larger with my work the possibility of actually
making the company a LLC has crossed my mind. When I was first starting off
with the company, I was very lucky when I went to the courthouse to register
my name there was an amazing lady who guided me through every step. At least
as of now, you are in total control and you can juggle the multiple worlds on a
day-to-day basis. Once you become an LLC then you may lose the money
invested and no longer have the ability to control day-to-day operations 100% as
you do now, however you could have fewer risks to worry about should you
incur a lot of business expenses.
When a local business can give back to its community by spreading and speaking
the knowledge of a "body" of people positively, it is refreshing. I have tried a
few times to google review businesses that I believe in however unless the
business is booming with media attention or well known due to its own branding;
reviews sit at.Owning a franchise could be very beneficial to a person I feel.
Being backed by the big corporations name can help with business setting the
standard of the business. A lot of franchises have a a lot of rules and guide lines
to follow from food to what the employees wear while working. Chick-fil-a has
always had professional standards and make sure that they are getting people
through as fast as possible. I remember when they opened the drive thru only
during the pandemic they had people getting through a wrapped line in twenty
minutes. I feel like having these standards on how the business looks and runs
helps with the day to day function of the business. Everyone knows what is
expected of them and how to present themselves. Even though the fees and costs
are high to join a franchise it also provides a lot of protection when it is needed.
In my understanding, within a corporation, the shareholders, directors or owners are
protected from being the target of a lawsuit against them as individuals, but rather
the judgement falls upon the company itself. This is the very concept of limited
liability in corporations. However, in such extreme situations where a violation has
been made, and an individual within the company is believed to be held
completely responsible for actions of the company, the court can pursue "piercing
the corporate veil" by deferring limited liability. In my opinion, this is a just
process because it is unreasonable for the company to be liable for the
misjudgment of an individual who clearly commits a violation such as fraud. No
one is and should be above the law. I like how you simply explained that LLC's
are a type of protection for companies and its members from legal liabilities. I'm
sure that the process to apply for an LLC license is more in depth than a small
business, however it was interesting to learn how much flexibility owners have
when it comes to taxes and agreements. It was also assuring to learn that there is
continuous flexibility of agreements for members, as well as a government default
in the event no agreement is made. To my understanding, it seems very
comparable to small business statures. When researching local businesses for my
discussion post, I came across many small businesses that were under a LLC, and
now I understand why.
References
Sole proprietorships: What you need to know. Sole Proprietorships: What You Need
to Know | Startups.com. (2021). Retrieved June 14, 2023, from
https://www.startups.com/library/expert-advice/sole-proprietorship
