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Legal and Ethical Considerations Essay

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Background

My opinion is that a limited liability company would fulfill their purposes best among the legal forms mentioned. An LLC provides the same legal protection as a corporation while allowing each participant equity in the venture. Because an LLC can be taxed as a partnership or corporation, its members pay its taxes with their returns (Kwilinski et al., 2019). An LLC has the lowest tax rate and is one of the easiest business entities to use. This essay aims at looking at some legal and ethical considerations that can arise from the case study.

Ownership And Control

The members of an LLC are required to draft a legally binding contract or agreement that outlines how the ownership and control of the business are to be distributed among the members of the LLC (Kwilinski et al., 2019). In addition, it will specify where the authority will go, how the business will operate and be governed, and the level of risk that each party is willing to assume.

A general partnership is a business venture where two or more parties agrees to start a business that they share equally its profits, losses and any liability. This legal type is subject to taxation in the same manner as a partnership, with each partner reporting their respective shares on their tax returns. For a new business, general partnerships are an economical and straightforward choice to make.

The partners in a general partnership agree about who will own what and who will have authority over the business. This agreement is not legally enforceable and is more of a verbal contract than anything else (Kwilinski et al., 2019). GP will have a clear concept of how the firm is to work, and they will determine that each owner will have an equal portion of ownership.

Taxation

Each partner is responsible for reporting their share of the business’s profits and losses, in addition to their self-employment tax obligations, when it comes time to file taxes on a general partnership.

Liability

In a general partnership, partners liable for debts and loses made by the company in the case that it is not successful. The general partnership type exposes the partners to the possibility of suffering personal loss due to their responsibility for the business’s debts. In addition, it is also their responsibility to make all corporate decisions about the organization.

Fair Labor Standards Act

In this circumstance, the employer has the responsibility to pay workers for the number of hours they put in and compensate them equitably for any overtime they put in. Employees who have a portion of their income withheld because of factors beyond their control (low sales). In this situation, the employer owes the customer an ethical duty as a matter of good business practice (Kwilinski et al., 2019). Attempting to mislead customers about the product’s quality could be detrimental to the company, but being truthful results in increased trust and a better reputation. This is why openness regarding the product’s quality is essential. Every employee owes the same moral commitment to the company’s clients, which is to provide high-quality services and goods (Kwilinski et al., 2019). Being truthful with clients about the products they are purchasing and not trying to trick them into thinking anything different is more ethical behavior.

Reference

Kwilinski, A., Volynets, R., Berdnik, I., Holovko, M., & Berzin, P. (2019). E-Commerce: Concept and legal regulation in modern economic conditions. Journal of Legal, Ethical and Regulatory Issues, 22, 1-6. Web.

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IvyPanda. (2023, June 20). Legal and Ethical Considerations. https://ivypanda.com/essays/legal-and-ethical-considerations/

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"Legal and Ethical Considerations." IvyPanda, 20 June 2023, ivypanda.com/essays/legal-and-ethical-considerations/.

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IvyPanda. (2023) 'Legal and Ethical Considerations'. 20 June.

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IvyPanda. 2023. "Legal and Ethical Considerations." June 20, 2023. https://ivypanda.com/essays/legal-and-ethical-considerations/.

1. IvyPanda. "Legal and Ethical Considerations." June 20, 2023. https://ivypanda.com/essays/legal-and-ethical-considerations/.


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