Today’s business environment requires leaders to have competency in effective organization design and to consider legal factors that influence whether
strategic goals are achieved. In this task, you will discuss legal entity types and their influence on taxation, liability, and ownership and control. You will also
discuss the legal and ethical obligations that an employer and employees have in a business context.
Scenario
A local farmer and a supermarket retailer plan to enter into a business venture to open a downtown farmers market every weekend from April through
October. The goal of the farmers market is to bring fresh organic produce to an area of the city that would otherwise not have access to organic fruits and
vegetables.
The retailer would like to have more decision-making authority in order to control the marketing and ownership of the warehouse space that will host the
farmers market. The local farmer is personally concerned about the financial impact of having a primary stake ownership because the farmer does not want
to suffer a large financial loss if the business venture is not successful. (The farmer has been affected in the past by things outside of their personal control,
such as excessive rain which caused decreased profits over the past two seasons) The retailer has proposed they include outside investors in order to have
access to capital and expertise that will help create distribution efficiencies. The local farmer would like to limit outside investors and external decisionmaking influence in the business because the farmer doesn’t want to lose primary control of the farmers market.
The local farmer currently grows enough produce to have 20 stalls at the farmers market. The retailer would like to plan for growth by beginning the farmers
market with the produce that the local farmer grows and then double the number of stalls offered each year by adding organic options from other regional
farmers markets to build sustainable networks. The retailer proposes organizing the farmers market venture as a corporation, while the local farmer
recommends organizing as either a limited liability company or a general partnership.
Two years after the retailer and local farmer establish the farmers market, there has been notable growth. The farmers market has expanded to include
additional regional farmers who provide more produce every weekend. To manage the farmers market, the retailer and local farmer have hired general
managers with extensive experience in organic retail sales and promotion. The retailer requires that some of these managers work overtime hours on the
first Saturday of each month so that new products can be staged and merchandised before the market opens each weekend. However, the retailer does not
pay overtime wages to the managers, claiming that the required overtime is management training and an investment in their future career development. For
some reason, the female managers are always the ones required to do this extra work even though they have similar levels of experience to the male
managers.
Besides the general managers, the farmers market also employs several employees. The employees stock the stalls with produce. The managers
occasionally require the employees to carry unreasonably heavy boxes of produce from the trucks to the stalls. These heavy boxes should be moved with a
hand truck to prevent injury, but hand trucks are not always available. One employee recently strained his back lifting a heavy box.
On the first Saturday in May, the general managers identify substandard produce that has been damaged or is not ripe. The general managers notify the
retailer that this produce should not be sold. However, the farmers who provide the produce will only get paid if the merchandise sells, so the retailer tells the
general managers that they should display the produce so that customers will not be aware of the substandard quality. The retailer also suggests that if the
sales are not 10% higher this weekend than last weekend, the general managers may not receive a full day’s wages for their work today.
Requirements
Your submission must be your original work. No more than a combined total of 30% of the submission and no more than a 10% match to any one individual
source can be directly quoted or closely paraphrased from sources, even if cited correctly. The originality report that is provided when you submit your task
can be used as a guide.
You must use the rubric to direct the creation of your submission because it provides detailed criteria that will be used to evaluate your work. Each
requirement below may be evaluated by more than one rubric aspect. The rubric aspect titles may contain hyperlinks to relevant portions of the course.
Tasks may not be submitted as cloud links, such as links to Google Docs, Google Slides, OneDrive, etc., unless specified in the task requirements. All other
submissions must be file types that are uploaded and submitted as attachments (e.g., .docx, .pdf, .ppt).
A. Compare two of the proposed legal entity types for the farmers market venture by doing the following:
1. Describe one of the legal entity types identified in the scenario (i.e., Corporation, Limited Liability Company (LLC), or General Partnership) and then