Establishing a Clothing Boutique
Part A
You and Marsha, a good friend from your college days, have decided to open a trendy clothing boutique. You have found a location that looks promising and retained legal counsel to negotiate a lease with the landlord and prepare any paperwork you might be required to register the business with the state. Unfortunately, you cannot agree on how to set up your business. Marsha favors a partnership and you prefer to incorporate. The two of you schedule an appointment with your attorney to discuss the pros and cons of each, as well as other options that the two of you may have overlooked. In table format, summarize the advice your attorney provides for a general partnership, limited liability partnership, public corporation, and sub-chapter S corporation. His advice should include: tax ramifications, control considerations, liability, ease and expense of formation, transferability of ownership, and ease of expanding the business.
Part B
You and Marsha realized after your last meeting with your attorney that you neglected to ask him about the duties you will owe each other if you decide to go with a general partnership formation. You schedule a second meeting with him. Summarize the duties and rights each of you has under a general partnership.
Part C
Visit www.mycorporation.com. Watch the following very short videos that are available: LLC v. Corporation, Where Do I Incorporate, and What’s Next? Summarize the results of each video.
Part D
Marsha envisions that down the road the two of you may wish to produce your own clothing line. She wants to manufacture the garments in China or India. You have reservations about expanding your operations outside the U.S. Locate five (5) scholarly articles that are devoted to the topic of expropriation risk, including creeping expropriation. Once you have compiled your articles, draft an argument in which you take a stance for or against manufacturing your clothing outside the U.S. You must support your opinion with evidence and research. In the event the research favors a country other than China or India, discuss your reasoning. Remember to consider the advantages/disadvantages of producing clothing made and sold in the USA. Your discussions should address environmental concerns and the impact outsourcing will have on American workers. Consult all relevant chapters of your textbook.