Reference no: EM132202423
Paul has just won a million dollars in the New Jersey Lottery and has decided to pursue his life-long dream of going into business for himself. He has decided to open “Beer and Brats” in downtown New Brunswick.
In accordance with Paul’s religious beliefs he will sell only beer and ale, no hard liquor or wine. Paul has come to you for advice. He wants to know how he should organize his business.
(1) Outline the various options available to Paul, including the pros and cons of each business form available to him. Conclude by advising Paul as to which legal form he should use when settling up his business. Please give reasons for your decision.
A year has gone by and business is booming at the New Brunswick location. As a result Paul has decided to open another location in Trenton and have his sister, Mary serve as the general manager. At first business is slow, so Mary decides to begin serving hard liquor and wine. Without Paul’s knowledge or consent, she enters into a written agreement with Sally, a sales person employed by Joe’s Liquor, Inc. to buy one dozen cases of assorted hard liquor every week for a year. In return for entering into the agreement, Sally agrees to refund Mary three percent of the cost of the liquor. Mary does not tell Joe about this arrangement and keeps the money for herself to make-up for her low salary.
(2) Assume that business at the Trenton location is not good and Paul decides to close the location. Discuss the legal issues raised by Mary’s actions. Specifically, what is the liability of the parties to each other?
Assume that business at the Trenton location is excellent and Paul decides to forgive Mary for going against his mandate regarding hard liquor and for taking the three percent from Sally. In fact, he decides to make her a partner in the business. (3) Outline the terms that should be included in the partnership agreement between Mary and Paul.
Two years after Mary and Paul become partners business is so good that they decide to expand and open two more locations in New Jersey. (4) Discuss their options for raising the two million dollars of capital they need to open the additional locations and explain the positive and negative aspects of each option.