Business Entities, Laws, and Regulations Paper
Lou and Jose have plans to open a sports bar and grill, but they do not have the capital to start the business. Miriam, a wealthy investor, can provide the start-up capital to establish the business, but she wants to be included in the partnership. The new establishment will now consist of the three partners. Lou and Jose are responsible for the day-to- operations of the sport bar and grill while Miriam remains as a silent partner. This type of business entity is a Partnership. The general partnership consists of Lou and Jose for operational purposes and Miriam will have a limited partnership. Miriam will have no control of business activities because the main goal of her investment is to earn a profit.
General partnerships usually allow all partners to have equal control. According to The General Partnership, there are three requirements. There must oral and written agreements for all parties wanting to form the partnership. The object of the agreement is for all partners to share the profits of the business. The last requirement is the business must be carried on by all partners or a single partner in behalf for all partners. Taxation policies require each partner to pay individual taxes. Lou and Jose have unlimited liability, giving them the responsibility for the daily activity. Miriam has limited liability because she only invested funds and is covered to the amount of the funds provided. All partners are required to act in a lawful and ethical manner.
Lou and Jose are required to follow regulations to form a partnership. Some requirements are to complete a partnership agreement to include names, addresses, capital contributions, profit and loss ratios, and responsibilities. If alcohol is served at the establishment, both owners must obtain a liquor license with local state government. The permit must on display and visual to all. Both partners should also evaluate their legal...