Business law for commerical transactions
Business law for commercial transactions
Business law is the law body that covers issues related to the relations, rights, the conduct of persons and well as businesses that are engaged in commerce, sales, trade and merchandising. It is also known as commercial law and is for the most part regarded as a facet of civil law that deals with both the private and the public laws. The law is involved in the governing of the areas that constitute business, consumer transactions as well as commerce. This paper discusses the issues related to business law in two case studies and the options that are available in each instance.
In the first case study, where Bert, Ernie and Oscar are supposed to form a general partnership I solely agree with the formation of the partnership as the trio get into business together. That is because general partnerships thrive and grow when each of the persons or partners brings to the partnership a specific strength. It is up to them to agree on the terms that are to bind the partnership and see to it that the business runs smoothly. Forming a general partnership, the three will enjoy a couple of advantages and still at the same time suffer disadvantages in other ends. The trio will operate under the partnership agreement, which they will not be required to file one with the state, as there are no laws that require an agreement in writing for general partnerships.
The advantages that the trio are bound to enjoy includes the advantage of easy formation. The trio will not have to deal with a lot of paperwork as opposed to other institutions of business such as corporations, this is because they’re coming together in business does not have to be formal. With the partnership, they intend to form, the trio will enjoy the advantage of passing through profits and taxation. As such, persons in a partnership are taxed individually as in a sole proprietorship. Lastly, in case they have to dissolve the partnership, the dissolution process is simple, and the persons in the partnership are fully liable for their business.
On the other hand, the trio might collide with challenges or disadvantages that are associated with the type of partnership they form. Firstly, in case they ever need to expand the business and outsource, they will be crippled as general partnerships only accommodate small numbers of people. Also, some of the partners tend to abandon responsibility as the business grows big making personal liability impractical. Better options for the trio would be to have a partnership for a specific period to reduce the chances of dissolution or abandoning o responsibility. The trio would also have a limited liability partnership instead of the general partnership. I would recommend the carrying out of the business of the partnership for a specific period, which is subject to renewal at their decision.
In the third case study, where Time Warner wants to buy the shares owned by Jerry Levitt, there is a couple of factors to be considered. To start with the rights of the person in conflict, Jerry Levitt has the right to retain his shares and sell them to whoever he wishes. On the other hand, Time Warner has the right to buy a share from whoever person, it chooses and comes into an agreement. However, working for a competing company Jerry should sell the shares he owns in the competitor company to the company. According to the rights accorded to shareholders, a shareholder can review the corporate books and records of the company, it is therefore dangerous for the company if the shareholder works as an executive in the competing company.
According to the shareholders Protection Act, a shareholder has the right to decide whether to keep their shares or sell them to whatever buyer they please. The law protects the shareholder from cases such as that of Jerry Levitt and Time Warner. However, Time Warner can eliminate the risk presented to the company by Jerry Levitt by the use of freeze-out mergers. Where the company eliminates the minority shareholders by transforming into an entirely new company. With the dissolution of Time Warner in the course of the process, Jerry Levitt will be given cash in exchange of his shares in the already dissolving company.
In my decision in solving the case, I would have Jerry Levitt sell the shares to Time Warner for the purpose of a fair competition since he is working for a competitor company.
Andrews, W. D. (1965). The Stockholder’s Right to Equal Opportunity in the Sale of Shares. Harvard Law Review, 505-563.
Callison, J. W., & Sullivan, M. A. (2012). Partnership Law and Practice: General and Limited Partnerships. West.
Commercial Law. (n.d.). Retrieved May 31, 2015, from https://www.law.cornell.edu/wex/commercial_law