BUS311: Business Law
Professor David MacKusick
March 8, 2015
Business entities face numerous factors that will decide how they are organized, and the type of business an entity is involved in will be the deciding factor for legal ramifications in actions taken against it. Acme Fireworks is a small business organization that was established two years ago by its owner. Acme Fireworks is a fireworks retailer who sells fireworks, puts on grounds displays of fireworks, and in addition, puts on large aerial displays of fireworks. Over the course of the life of the business it has grown large enough to now employ 15 employees but has remained a sole proprietorship. Acme Fireworks has received inquiries from several large businesses inquiring if the company could create several fireworks displays on a regular basis. Acme Fireworks determined that it could fill the display orders, and entered into a contract with the inquirers. Skilled labor, insurance, and the actual service of setting off the fireworks will require additional resources for the company. The owner of the company is concerned that the factors of growth associated with the additional orders will cause the company to grow to an unsustainable size but knows that as a sole proprietor the owner will be liable. Acme Fireworks will impact all areas of liability, taxation and legal consequences associated with its operation; evaluating the future of how business will be conducted provides strong support for Acme Fireworks to form as a limited liability corporation to protect its stability.
Acme Fireworks has made a verbal agreement and entered into a contract. Contract law and how judgments will be determined with Acme Fireworks come down to jurisdiction and the factors surrounding the agreement made between Acme Fireworks and its inquirers. Either the agreement will come down to a common law dispute or the rules of the...