Download Unit VII Case StudyColumbia Southern UniversityUnit VII Case and more Lecture notes Accounting in PDF only on Docsity! Unit VII Case Study Columbia Southern University Unit VII Case Study During this case study, two gentlemen named Ted Brown and Jim Green had been contemplating for months of starting their own business that consists of the mobile app for locating family attractions based on central highway locations with the assistance of their sons. Mr. Brown, who had an 18-year-old son name Theodore and Mr. Green, who had a son named James that was 16 years of age, would conduct the negotiations on behalf of their fathers due to other business obligations they both had. Based on the research I have conducted; we will determine if the contract can be formed legally between the sons and what duties they would have to their fathers. We will also determine what Ted and Jim need to consider when deciding the type of business, they would like to form, which business type would be to their advantage, and what disadvantages they could face from electing to form a business based on the business structure. Can a business be created legally? Jim Green and Ted Brown have decided to establish a business with one another; however, they do not have the time to finalize the remaining parts of the business deal on their behalf. Legally the two sons can create a business. However, based on contract law in most states, a minor cannot start a business. Being that James Green is only 16 years old, he is considered a minor. He cannot conduct negotiations nor legally sign an agreement related to establishing a business on his fathers' behalf. (Kubasek, 2011). Theodore is of legal age. The fathers have two options; Theodore and James Green could create the agreement if Jim Green is present, and Mr. Green and Theodore Brown execute the documents. The other option would be for Mr. Brown and Jim Green to conduct the negotiations themselves and then execute the documentation to have a legally binding contract to form their business. What are the duties that are owed? As we know, Mr. Green's son cannot legally enter a business contract due to his age restrictions. If it were possible, both sons would be considered agents within the business. Mr. Brown and Mr. Green would be the principles because they are the owners of the mobile app business. Being that Ted Brown and Jim Green are the owners, they have the right to retain or hire individuals to help support the business's day-to-day decisions and operations. By giving their sons the authority to perform tasks they can do, Theodore and James would be acting in an agent capacity. (Kubasek, 2011). They would have a duty to their fathers to negotiate and make decisions on what would be best for the business, and it is operations making make them Contract Representatives. (Mann and Roberts, 2015). What factors should be considered when selecting which business to form? When determining what factors are relevant when forming the mobile app business, Mr. Brown and Mr. Green need to consider which business entity will be beneficial to the needs of their business. Based on the case study provided, Ted and Jim need to form a business that allows them to accumulate funding to develop and deploy their product. They need to control how their business operates while being able to take responsibility and ownership for the company and the services they provide. Being that it is a startup company, they need to have the opportunity to retain an attorney to discuss their legal obligations regarding their liabilities and tax obligations. (Mann and Roberts, 2015). Nevertheless, for their business to be successful, they need to consider the risk they face in creating a business, which is extremely important when seeking investors to venture into their partnership. Having a well-thought-out business plan that can capture the risk can show investors that see that they have a plan to reduce the risk and allow the opportunity to make a decision
