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.
a 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. a
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.
References
Sole proprietorships: What you need to know. Sole Proprietorships: What You Need to
Know | Startups.com. (2021). Retrieved June 14, 2022, from
https://www.startups.com/library/expert-advice/sole-proprietorship
