Here’s a quick round-up of what’s going on in class this week:
- In BUS 100-01, we’ll form teams and begin our study of business on Tuesday and look at economics on Thursday.
- In BUS 100-80, we’ll wrap up our goals matching discussion and start a discussion on business and economics.
- In BUS 263-01, we’ll form teams and begin our study of law and legal reasoning on Tuesday and move on to court systems on Thursday.
- In BUS 263-80, we’ll wrap up our goals matching discussion and start a discussion on law and legal reasoning and court systems.
- In PRL 101, we’ll talk about the paralegal profession on Tuesday and start learning about legal research on Thursday.
Well, the weather doesn’t feel much like fall yet, but a new fall semester has rolled around.
Classes start tomorrow, and I’ll be teaching BUS 100-01, Introduction to Business, BUS 100-80, Introduction to Business online, BUS 263-01, Legal & Social Environment of Business, BUS 263-80, Legal & Social Environment of Business online, and PRL 101, Introduction to Paralegal Studies.
Syllabuses for my online classes are available on their respective class pages (linked above), and the classes will go live tomorrow morning.
My face to face classes will meet for the first time on Thursday, and syllabuses should be available above tomorrow.
Have a great semester, and I’ll see you soon!
This week we begin studying small business organizations, or forms of business ownership. There are four forms of ownership that you need to know about: sole proprietorships, partnerships, corporations, and partnerships. Today we’ll look at sole proprietorships and partnerships, and next Tuesday we’ll look at corporations and LLCs.
Sole proprietorships are the simplest and most common form of business ownership in the US. Sole proprietorships have the benefit of being easy to form (you don’t have to do anything) and very flexible in the way they can operate. There are some downsides to sole proprietorships, however. One is that because there is only a single owner, it can be hard to raise startup capital—the business only has access to the funds that the owner can save or borrow. Given that the number one reason for new businesses to fail is lack of startup capital, capitalization can be a problem for a sole proprietorship, and it’s probably not a good business organization for a business that requires a good deal of capital. The biggest disadvantage of a sole proprietorship, however, is unlimited personal liability. Because the business has no existence apart from the owner, the owner is personally liable for all the debts of the business. Any money the business owes, whether it’s for unpaid bills, loans, or lawsuits, is a debt of the owner, and the business owner can lose everything. See the Simpsons episode “When Flanders Failed” for an illustration of what happens when a sole proprietorship doesn’t work out.
Partnerships are an agreement among two or more persons to operate as co-owners a business for profit. Partnerships have much in common with sole proprietorships: they’re easy to form and flexible in how they can operate. Partnerships can make it easier to raise capital than a sole proprietorship because there are multiple owners who can save and borrow capital, and multiple owners means more sharing of the responsibility of business ownership and a greater range of knowledge, talent, and skills. Like a sole proprietorship, partners feature unlimited liability, so the partners are personally liable for the debts of the partnership. Additionally, partnerships feature joint and several liability for partnership debts. That means that in addition to being liable for the debts together, each partner is personally liable for the entire amount of the debt. Remember the fable of the grasshopper and the ants? What happens if you have a partnership with three grasshoppers and an ant? The grasshoppers blow all their profits on cars and vacations and living a life of luxury while the ant lives frugally and saves up a big nest egg for retirement. When the partnership gets sued, the grasshoppers don’t have any money so the plaintiff collects the entire judgment from the ant, who is now broke. What happens if one partner gets disgruntled, takes out a huge loan in the name of the partnership, and skips town? Who has to pay back the loan?
Next, complete the following assignment to be turned in at the beginning of class on Tuesday, April 21:
Don’t forget that the final version of your will drafting assignment is due at the beginning of class next week. We’ll talk a little bit about will execution ceremonies and how to prepare the final draft for the client.
After the wills, we’ll have test 3, This time, the test will consist of 50 multiple choice definition questions like we saw in the review game. Following is a list of sample questions. See you next week, and get in touch if you have questions or need help before then.