Legality Proposition, Business Law Essay Sample

Boot & Booty Company started by John and James is intent to deal with the sale of shoes in the fashion industry. It is not a necessity for John and James to have all essential skills to operate the venture. However, having common knowledge of legal requirements is critical to answering legality questions. Since there is no limit to membership, the owners have the jurisdiction to contract or hire competent individuals to help in carrying out the operations of the business. More so, the founders are at liberty to create a body of directors that offer auxiliary support. It is essential to consider the depth of experience of the board members to ensure they discharge the right service.

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James and John as the founders of a limited company, it is a requirement that a minimum share capital deposited in the commercial bank. It implies that founders should have enough startup capital upon registration to commence the business operations. According to the Greek regulation 3190/1955 under article three, venture capital regarding mutual funds management, stock exchange, portfolio management, banking, and insurance are expressly excluded (Jelsma & Nollkamper, 2017). Partners are at liberty to determine the source of capital contribution to commence the business activities. It the contribution towards the venture capital regards assets, it is advisable that valuation is carried out.

It is essential to recognize that in the first years of a new business, it is not a mandate that it will earn the much-anticipated profits to cater for operational expenses. Borrowing from the banking financial institutions using company's asset as collateral ill enable the business to meet the costs in the first year. Highlighting unnecessary expenses that leads to wastage minimizes high total expenses in the first fiscal year. Seeking assistance from donors and international bodies who understand and foresee the future of the business as profitable makes it easy to obtain enough financial resources to overcome the financial burden of the first year. James and John can seek financial aid from friends and family members to pay for business expenses.

The life of a limited liability business venture is limited implying that the founders of the business share the losses of the business, however, the business ceases to exist once a member withdraws from the partnership. Once a member has departed, its requirement to start a new business venture or shut all the operations (Johal, Campbell & Marsh, 2016). For purposes of avoiding such situations, setting special provisions in the initial stages of an agreement to keep the going concern of the business in the event a member withdraws from the company. If John ad James business owes creditors any accrued amount and the business fails to pay creditors, the creditors have an obligation make a lawsuit against the company. However, they do not have a right to claim compensation from James and John personal assets such as real estates and bank deposits. The assets of the company can be sold in the event of business failure to pay any amount due to creditors and not the owners.

The control of the business under the management committee established by James and John. If there is no a management committee, James and John have a responsibility to maintain a record of financial accounting. However, the founders bear all tax liabilities. At the end of every fiscal year, the company is required to file tax returns. Additional, if James and John Company make a net profit of $80,000 in a specific year, the amount will be divided twice because they are the only members present. The equal amount will be taxed as per the personal income tax of James and John as an overall tax liability.

References

Jelsma, P. L., & Nollkamper, P. E. (2017). The Limited Liability Company. LexisNexis.Johal, J. S., Campbell, C. A., & Marsh, M. C. (2016). Limited Liability Companies (Vol. 6). California Legal Forms--Transaction Guide.