Running Head: Changing Business Entity                                                                          1

 

ACME Fireworks Company

Talonda Brown

BUS311 Business Law I

Instructor: David MacKusick

August 7, 2016

 

 

 

 

 

 

 

 

 

Changing Business Entity                                                                                            2

Introduction

           In this scenario, the owner requires to change the business entity from sole proprietorship to corporation entity and hire additional qualified employees to handle the fireworks order. The current five employees are not skilled and may not be able to handle the fireworks order correctly. Hiring new skilled employees will enable the owner to have a complete team that will be able to effectively deliver to the company even in the future orders.

 

 

 

 

 

 

 

 

 

 

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Thesis Statement

               A corporation is a legal entity, carrying out its business in line with state law, whose range of activity and name are restricted by its charter Cadman, John William (2012). Articles of incorporation should be filed with the state to establish a corporation. Stockholders' are protected from liability and stockholders who are also staff may be able to enjoy advantage of some tax-free benefits.

          When you decide to change your business entity and employee skilled additional staff to handle your orders, you have several decisions to make.  The most critical decision you will make is which form of a business entity to establish. There are several entities to choose from and each will have its own merits and demerits. Analyze every choice from a tax standpoint and evaluate any legal liability considerations when deciding which will best fit your business Dodd, Edwin Merrick (2014).

 

 

 

 

 

 

Changing Business Entity                                                                                            4

Changing Business Entity from Sole Proprietorship to Corporation

        The name of your corporation must be in line with the regulations of your state's corporation division. You should see your state's office for specific regulations, but the following guidelines usually apply:

• The name cannot be the similar as the name of another corporation on file with the corporation’s office. This is meant to avoid confusion and unfair completion in the market.
• The name must end with a corporate designator, such as "Corporation," "Incorporated," as this is the correct title for corporation.
• The name should not have certain words that show an association with the federal government or restricted type of business.

Your state's corporation’s office can show you how to find out whether your suggested business entity name is available for your use J Mickle thwait and A Wooldridge. (201). usually a small cost is charged. , you can reserve your corporate name for few days until you submit your articles of incorporation.

Employing Qualified Employees and Appointing Directors

         Directors will come up program of employing additional qualified employees to handle the fireworks order as well as with policy and financial decisions for the new business entity. Directors are generally appointed by the initial owners (shareholders) of the corporation before

Changing Business Entity                                                                                            5

the business starts operating under new entity Davis, John P. (2009). Normally, the owners simply appoint themselves to be the directors, but directors do not necessarily need to be owners. The owner should consider hiring additional qualified employees who will be able to handle the fireworks order and deliver greater results to the company.

Drafting Corporate by Laws

       Bylaws are the internal rules that govern the day-to-day operations of a corporation, like how the company will secure additional fireworks order from clients. To develop bylaws, you can either follow the instructions in a self-help resource or hire experts in your state to draw them for you.

Holding a First Meeting of the Board of Directors

      After the owners appoint directors, submits articles of incorporation, and develops bylaws, the directors must hold an initial board meeting to handle a few corporate formalities and make some important decisions like employing of new skilled employees to handle fireworks order. At this meeting, directors usually:

·         Approves recruitment of new skilled employees

• set the corporation's production limit
• adopt the corporate bylaws

 

Changing Business Entity                                                                                            6

Obtaining Licenses and Permits

       After you've submitted your articles, developed your bylaws, had your first directors' meeting, you're now ready to go. Having business license will ensure that you don’t land into problems with law regulation agencies and ensure smooth running of the business operations Bromberg (2014). But you still need to get the needed licenses and permits that anyone needs to start a new business entity, like a business license. You can also required to get an employer identification number from the IRS, a seller's permit from your state.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

References

 

 Bromberg, Alan R. Crane and Bromberg on Partnership. 2014.

 

 Brown, Bruce. The History of the Corporation (2003)

 

 Cadman, John William. The Corporation in New Jersey: Business and Politics, , (2012)

 

Conard, Alfred F. Corporations in Perspective. 1976.

 

  Cooke, C. A., Corporation, Trust and Company: A Legal History, (1950)

 

  Davis, John P. Corporations (2009)

 

Dodd, Edwin Merrick. American Business Corporations until 1860, With Special Reference to Massachusetts, (2014)

 

 DuBois, A.B. The English Business Company after the Bubble Act, , (2010)\

 

J Micklethwait and A Wooldridge, The company: A short history of a revolutionary idea (Modern Library 2013)