Two Part Discussion Question and Case Study
Unit VII Discussion Board Question
Corporations have been around for a long time, but limited liability companies (LLCs), which have many of the characteristics of corporations, have become popular in recent years. When is an LLC a better choice for a form of business than a corporation? Why? When is a corporation a better choice for a form of business than an LLC? Why?
Ted Brown and Jim Green have been discussing going into business together for several months, and they are anxious to start that business before the end of this month. However, both Ted Brown and Jim Green each have to be out of town for several weeks on other business, so Ted Brown has told his son, Theodore, who is 16, about the discussions with Jim Green and has appointed Theodore to complete negotiation of the final details of the business. Jim Green has told his son James, who is 18 years old, about the discussions with Ted Brown and appointed James to complete the negotiations.
The business that Ted Brown and Jim Green want to create will develop an app for cell phones that will identify family-oriented attractions along major highways so families can
the app to help in planning family vacations. The development of the app will take 4 months, and then it will take approximately another 4 months to fully deploy the app. As the app becomes popular, the business will solicit family-oriented businesses to advertise on the app. Ted Brown and Jim Green have very little capital to use in the development and deployment of the app and will probably need to raise the capital necessary to develop and deploy a quality app.
In your case study, address the questions below.
Can Theodore Brown and James Green legally create the business that Ted Brown and Jim Green have been discussing? Why, or why not?
If Theodore and James do create the business, what duties do they each owe their father? Describe what those duties mean in this case.
What factors do Ted Brown and Jim Green (or their sons on their behalf) need to consider in selecting a form for this business?
What form of business will provide the most advantage for their venture?
What are the disadvantages of the form of business that they selected?