About Business Law

There are many different company models, so choosing one that succeeds in light of the restricted resources at hand and legal constraints becomes a problem worth doing some market research on first. Both internally and externally, legal difficulties have an impact on the organization, which might involve demands for things like tax compliance, insurance coverage, and environmental concerns, among others. As a result, one needs to be aware of all the regulations and formalities before starting a firm. Since making a profit is the main goal of beginning a business, one must select the structure that will generate the most income. This discussion highlights the criteria, to be used by any investor, to select the best business from and describes and efficient business models to consider. The paper goes ahead and explains how to deal with a competitors who copy the ideas of other companies. Lastly, it describes how to dissolve a corporation and gives the best information on handling debt claims. The paper seeks to enlighten business people on how to operate and manage the company while delivering quality products and services.

Business law

Introduction

There’re various forms of business to choose from when planning to invest. Each form of business has its requirements and regulations that are different from others. It is, therefore, vital to consider the type that will most suit your idea and resources. Paul, Ronald, and Sara have different capacity from each other; therefore, the best form of business to engage in would be Limited liability Company because of its multiple benefits. A limited liability company is a business that offers tax advantages of a partnership and limited liability of a corporation. Limited liability means that the firm is liable for losses or damages caused, but partners cannot be held responsible. Additionally, Limited Liability Company is flexible with regards to taxation and management in the sense that members can choose how they will be taxed (Miller & Hollowell, 2013). Taxation can be like that of partnership where an individual is taxed on his or her share of profit or else they can choose corporation tax. Corporation taxes are lower than income taxes and are best to decide if the members wish to invest their profits in growing the business. The manager in a company can be a member or nonmember. Another advantage of Limited Liability Corporation is the transfer of ownership that is; the enterprise cannot be dissolved at will unlike for example in a partnership business.

Steps followed to establish Limited Liability Company

The first step is obtaining and filling a copy of Article of Organization form from the state secretary. The Article requires the name of the business, address and the members’ names (Miller & Hollowell, 2013). Once filled, it is submitted to the secretary of state and filing fees paid according to the state requirements. Besides this mandatory legal requirement, creating an agreement that outlines the rights and responsibilities of each member is essential. The agreement brings about who is responsible for what and how the profits will be shared among the partners.

Business model

A business model describes a framework of how an enterprise creates, delivers and captures the value in different contexts (Casadesus, 2013). The best model that could help Paul would be a low-cost model because the model will make their products and service to reach a significant volume of customers. A collective model, on the other hand, is applicable where the company has many businesses while a franchise model requires the business to use another company’s model. Another model is the direct sales model which is best applicable when one has earned the trust of particular consumers.

Coping with competitors using your ideas

Some people wait for another peoples’ ideas to copy for their advantage. However, Paul’s’ idea of lowering the price is a losing game. Lowering the price of the products means making less profit or making losses which make the business to fall. The best way to deal with companies that copy Paul’s’ idea is as outlined below.

Being innovative

Innovation means doing things differently. It includes adding new commodities in the market and improving the already existing products to scare off the competitors. A market research is used to understand the target consumers and then act faster to meet the needs of the consumers.

Evaluating competitors

Evaluation of competitors involves knowing the Strengths, Weaknesses, Opportunities, and Threats, SWOT analysis. SWOT analysis requires Paul to understand the strengths, weakness, opportunities, and threats of his business rivals.

Legal issues

Legal action, for example, use of trademarks is also an alternative. Trademarks distinguish the original manufacturers’ products through the use of marks and mottos thereby making the target consumers discern complex products in the market.

Dissolving a business

Dissolving a business starts with filling the Certificates of Dissolution with the state. The document is filled before notifying the creditors following up with filling of the tax forms. Filling these forms requires consultation with the tax advisors to give you the requirements. The next step is telling the creditors plans to dissolve the business and giving them adequate time to present their claim statements. One has to inform them the conditions of barring the claims. After receiving the claims, one has to proceed to agree on the percentage to settle these claims. However, the claim can also be rejected, and a letter drafted to the creditor to tell them that you have denied the claim. The last step is usually distribution of remaining resources among the members and the shareholders to the company.

Filing a bankruptcy protects the debtors from creditors’ claims. However, this does not mean that the debtor is cleared completely off the debts (Miller & Hollowell, 2013). If Paul, for example, considers filing bankruptcy, it would ruin his reputation, and above that, his life became difficult since one cannot get some services, for instance, owning a mortgage if he is declared bankrupt. Filing the bankruptcy would also mean that if at some point if Paul wishes to reopen the business or start a new one, he will not have that chance. Bankruptcy has more disadvantages than the advantages, and therefore it would be of his best interest not to consider it. The best choice for Paul would be to create a debt management plan. The program involves negotiating with the creditors and agreeing on how you intend to settle the debt. Typically paying the debt is the best option ever.

Conclusion

Running a successful business involves a lot of efforts and patience. The investor will have to venture in business by first familiarize themselves with all the requirements. Business have failed because of adopting the wrong strategies and tough competition from their counterparts. Notably, successful companies invest in training and development. This serves as an advantage to them following the fact that they continuously come up with new and unique ways of performing their operations.

Reference

Miller, R. L., & Hollowell, W. E. (2013). Cengage Advantage Books: Business Law: Text and Exercises. Cengage Learning.

Casadesus‐Masanell, R., & Zhu, F. (2013). Business model innovation and competitive imitation: The case of sponsor‐based business models. Strategic management journal, 34(4), 464-482.