The Expansion of a Business: a Law Problem Question

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Expansion of Acme Fireworks Introduction There is a great deal to reflect on during an expansion of a business. How will you construct, market, and dispense your goods. Are you eager to assume full accountability for your goods and indulgent in the legalities of what occurs if your goods are faulty? Just the once that has been instituted, it’s significant to make certain that your dealings of business are in order. The power of the contract and what all it involves. Recognizing that the official document is significant further so when things are inclined to go downward. Above all is making a decision which sort of business entity the company will choose particularly if the company set ups out small and seems to expand. Which entities will most excellent serve the expansion of the company such as Acme Fireworks? It has got to be implicit that in spite of of the product utilized, every products have the potential to source customer harm. Consequently namely why it is significant to ensure the whole thing from the manufacture of the fireworks to the labels warning has been gone above to ensure that the merchandise is not defective. As we go frontward with the expansion of the company, we desire to be certain things are done correctly and that we will meet up or surpass our standards of customers’ at Acme Fireworks. The Uniform Commercial Code (UCC) or the Common law Principles of Contracts law in broad are consistently implicated and applied crosswise the USA. Contract Law is administered by the Uniform Commercial Code and the common law. Rather than a Common Law contract the Acme Fireworks owner must enter into a contract of Uniform Commercial Code[UCC] since it is a superior kind of contract for needs of commercial. “In UCC negligible changes does not have any effect and the original contract does not get revoked. The quantity is the foremost spotlight of the expression in UCC. Offers which are made by a business are irreversible if the contract is made in UCC are made in writing.

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  • Five elements of contracts

One more important issue is the contract. There are 5 fundamental constituents to a contract: Offer, acceptance, Consideration, Legality and Capacity (Rogers, 2012). Other retailers informed the proprietor of Acme Fireworks that they wanted a definite quantity of orders filled on standard basis for a time frame undisclosed and a price was established upon, this is the acceptance and offer segment of the contract. The offerers, which in this example are the big retailers, make an offer which once accepted by Acme Fireworks, generates a binding contract. Acceptance has got to be in several ways instituted by all participants of contract; it might be verbal, symbolical, oral or written. Consideration is an additional constituent of a contract and what consideration fetches to the table detect the whys and what’s: Why are we entering into the contract and what are you getting? Acme in this case acquires additional money by being competent to manufacture its goods and develop their brand and the retailers obtain fireworks from Acme. On the other hand in this example the Acme owner might have taken on a responsibility bigger than himself. This is a business with merely 15 workers and to fill up the orders with the fresh retailers, additional employees require to be employed. Not only do they require to be hired, however they require to be trained also. This has got to be done whilst filling out the orders. Here nothing is specified by the owner. How many employees do we require, how much flow of work will increase, and how large order we will have from the new retailers. No period of time was provided for the contract. Will this merely be only one order or is this somewhat that will order yearly. What happens if the orders are not fulfilled in an appropriate way is the contract then become null and void? An additional issue to ask is the capacity and validity of a contract. Capacity to contract denotes the legal capability of an individual to enter into a legitimate contract. Typically the capacity to contract renders to the capacity to enter into a lawful contract and the capability to execute some act. The essential part to enter into a legitimate contract is that s/he should have a sound mind.

  • Potential personal liability for injury to consumers owing by the product.

In the case mentioned here the employees would inspect accidents that happened at different places and make a decision whether they would charge more to recall the goods or recompense the entire cost for the alleged accident. If the costs are excessive to do a recall then the business would take accountability for the accident if a law suit is brought forth, on the other hand if it is economical to recall then the essential steps would be taken to recall the defective part. Recognizing this, it is significant that we put label on the goods regarding its appropriate uses so if any issues arises then it can be presumed that the maker of product had cautioned the buyers. Any harm in this way would not be the liability of Acme Fireworks, except the consumer. If somebody in a closet lights a firecracker and the firecracker goes off and harms the individual then the business is not accountable being that it is negligence on the consumer’s part (Rogers, 2012). Now if the similar person uses the firework on the outside in an open region as is stated on the label and they ignite the firecracker and it set off off in their hand immediately after the fuse is lit, then that is negligence on behalf of Acme. It has got to be implicated that despite of the goods properly utilized, all goods are expected to source injury to the consumer (Anthony, 1995). Consequently that is why it is significant to ensure the whole thing from the fireworks departments to make certain whether the caution labels have been carefully checked to ensure that the goods are not defective. If a fuse is excessively short in an item produced or if the material employed to source the firecracker to blow up is too much then that is a defectively manufactured goods. An additional issue might as well be the kind of firework that is made off. Let’s state for example that one of the goods has the inclination to blow up in severe temperatures and is placed in storage areas where the temperatures are severe then that is carelessness on part of the consumer, on the other hand if the consumer was not made cognizant of this by the producer then the accountability descends to the company. Insurance companies are stating “you can’t forever manage who is watching your fireworks display and by no means recognize who may file a court case in opposition to you for any bodily harm sourced by a rogue firework. In spite of how obscured liability of fireworks might sound, making certain you’re covered in the happening of injuries or property damage is as easy as finding the accurate custom insurance plan for fireworks that can be intended precisely for your needs (Xinsurance, 2009). And also the company will require taking steps to make certain that the customer is safeguarded and the company’s integrity is not negotiated.

  • Different types of employment

Acme has 15 employees full time as it currently stands. This is without considering the orders from the new retailers. What we make out is that the owner had acquired on further business, not taking into consideration the staff that we at presently have. For the orders to be fulfilled we would have to employ more labor force. Prior to this can be done we have to foremost reckon with what we have at the present. We at present have 15 people in Acme, to fill the fresh orders; do we hire on double or triple the size? If we do hire extra people, would it be on temporary or permanent basis? Employment is extremely significant when business is engaged. There are several things to reflect on when a labor force is involved. When it approaches with dealing with explosives it is significant that we consider finding individuals who have knowledge with working with fireworks and in addition are well trained. This will cost further funds for the company when it approaches to hiring persons that are trained to handle fireworks. Consequently these can’t be usual workers that one can locate at a temp agency. On the other hand, we do not know how much long period of time to employ these individuals since there is no clarity as to the extent of the contract, so the kinds of workers that we would have to employ would have to approach in from labor force agencies (Smith, V., & Neuwirth, E.B., 2009). The big thing regarding hiring from an agency is to select out of big pool of people. There are times when a lot of companies view temp agency workers as persons who are unskilled, on the other hand with the agencies types that are about today, they can find extremely skilled persons that several companies would be hard pressed to do, being that they would have to drain several resources to do so. And also once hiring process of new employees is over the business should watch it scheduling to make certain that they pursue the appropriate Fair Labor Standards Act of 1938 on the regulations of overtime, employee breaks, minimum wage hours worked, and as well pursue the Occupational Safety and Health Act of 1970 for the sustained safety and health of the business (Rogers, 2012).

  • A new business entity

It has to be implicated that this business established out of a garage a couple of years ago and is now grown-up into a business that employs 15 persons on staff. Currently with the fresh revenues that will approach into the company, Acme Fireworks will have to get bigger. Acme is a sole proprietorship firm owned by an individual. This is the easiest structure of organization to form. There is not much of paperwork in addition to the tax implications. If there is a loss for that year you can employ this loss to counterbalance your further income on your individual return (Fishman, 2014). Despite the fact that working as a sole proprietorship is easier, it can in addition have a number of setbacks as well. The most important problem is that there’s no division between the business and the individual with the sole proprietorship. That denotes that if somewhat happens in the business, like taking on big contracts with no apparent time line and limited staff and planning, you are made individually liable. For instance, if Acme Fireworks business is sued or runs into monetary difficulty, the owner would be individually liable and creditors and lawsuits can take over your personal assets. That is a concern since if the company profits go to counterbalance the debt, there is modest to no money to run the company suitably, develop, or look out for employees. This is merely one of the several things to reflect on when changing your business entity in addition to deciding on what is most excellent for your company as one. Acme Fireworks commenced its business out of a garage, like the majority businesses it is hard to raise capital or arrange long term financing since of fewer assets. As well there is one view and one voice which can fright big business opportunities away. This is why for the future of Acme Fireworks a Sole Proprietorship would not be practicable. Being in this sort of entity also makes it harder to expand. To expand and grow a company requires an official business structure. As a result the decision to make is which entity to select? With such a new undertaking to finish in such a small time, the risk would source a sole proprietor to desire to structure an LLC or incorporate into a new company. It would be finest in the case of Acme Fireworks, to modify the business entity to a company. Acme Fireworks has undertaken to supply goods to these fresh large retailers, would require additional capital to develop the business in addition to acquire the essential material to ensure that the new orders are capable to fill, in addition to fulfilling preceding obligations to the other retailers that we have trade with. Selecting this entity safeguards the owner from legal liability, provides the capability to draw more investors in the course of stocks, and has additional structure where there is not merely one voice for the company. The concurrence to this is the tax liability and the time and how greatly it cost to incorporate, unlike to a sole proprietorship, business incorporating takes a great deal additional paperwork, in addition to fee’s that require to be compensated to the state the business is in. Good thing for the employees is that even if anything happens to the owner, or if he retires, the company will still be integral not like sole proprietorships. Conclusion There are several things to reflect on when it approaches to operating a company, expanding it, and seeing it flourishing. There are several businesses that started out in a small garage, Bill Gates, Steve Jobs, and also men like John D. Rockefeller. On the other hand, growth cannot happen devoid of risk and determination. The most excellent way is to ensure that you’re prepared to expand is to be certain where you desire to take the business and have a resonance plan as to the steps one will take to attain there. Once you have an idea and financial backing the subsequent step is to make a decision which kind of business entity you desire to be. There are several entities to decide from and no one is superior to the next. It’s all regarding how you desire to mold and form your business. As a developing company, we require to make sure that our customers know their rights and we require making certain that our products have the appropriate labeling to pursue the US Title 16 of Federal Regulations. With the approaching of the fresh contracts and employees the enlargement of the company I advocate to convert itself into a corporation. This can safeguard the business as it expands in future. Reference:

  • S. Anthony, (1995). Warning: marketers must do better with goods warnings. Marketing News, (13). 4.
  • J. A. DAY, (2014).Protecting Yourself from Statutes of Repose. Tennessee Bar Journal, 50(1), 33-34.
  • S. Fishman, (2014). CHAPTER 2: Choosing the Legal Form for Your Business. In , Working for Yourself (pp. 15-54). Nolo.
  • V., Smith, & E. B.Neuwirth, (2009). Temporary Help Agencies and the Making of a New Employment Practice. Academy Of Management Perspectives, 23(1), 56-72. doi:10.5465/AMP.2009.37008003
  • R. Stim, (2010).Offer and acceptance. Contracts: The Essential Business Desk Reference, 327-330.
  • S. Rogers, (2012). Essentials of Business Law. San Diego, CA: Bridgepoint Education, Inc.
  • Xinsurane 2009, Event Home Fireworks Liability Insurance, retrieved on August 11, 2014 from
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The Expansion of a Business: A Law Problem Question. (2017, Jun 26). Retrieved November 30, 2022 , from

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