Download Businesses Workers, and the Law

Tennessee State CLEs
Describe advantages and disadvantages of the basic forms of business ownership
(sole proprietorship, partnership, and corporation) and identify variations of basic
forms of business ownership (franchise, limited partnership, cooperative, limited
liability company, and S corporation).
Determine which ownership structure is employed by the selected business and
hypothesize why it was selected.
Review copies of available partnership agreements, articles of incorporation or
franchise contracts, noting characteristics important for successful operation of a
given business. (TN Reading 1, 4; TN Writing 4, 9)
How do you think
laws affect business?
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Identify the different kinds of laws that affect
businesses.
Describe the different kinds of laws that protect
workers on the job.
Explain how tax laws affect business profits.
Explain the differences between copyrights,
patents, and trademarks.
Describe the different laws that protect workers
on the job.
Explain the importance of the National Labor
Relations Act.
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Rules that government
agencies issue to
implement laws
A lot of time and
money spent ensuring
compliance, avoiding
unwanted liability
Regulations
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Corporate law
Tax law
Intellectual property
law
Consumer law
Commercial law
Licensing and zoning
law.
Areas of Law that Affect
Business Operations
 Sole
Proprietorship
 Partnership
 Corporation
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Simplest kind of
business, easiest to start
Most common form of
business organization
Owned and managed by
one person
Owner entitled to all
assets (property owned
by business)
If proprietor has business
debts, creditors (those to
whom money is owed)
have first claims against
the assets
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Owner is boss
Owner receives all profits
Owner personally knows employees and
customers
Owner can act quickly in decision making
Owner is free from red tape
Owner usually pays less income tax than a
corporation
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Owner may lack necessary skills and abilities
Owner may lack funds
Owner bears all losses
Illness or death may close the business
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Primarily concerned with providing personal
services
One that sells merchandise or services on a
small scale
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Owned by two or
more people
A clearly written
and understood
partnership
agreement can
prevent problems
later
Net worth = assets
– liabilities
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Skills and abilities
pooled
Sources of capital
increased
Credit position
improved
Contribution of
goodwill
Increased concern in
business management
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Less tax burden than
corporations
Reduction in
competition
Retirement from
management
Operating economies
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Unlimited financial
liability
Disagreement
among partners
Each partner bound
by contracts of
others
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Uncertain life
Limited sources of
capital
Unsatisfactory
division of profits
Difficulty in
withdrawing from
partnership
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Restricts the liability of a partner to the
amount of the partner’s investment
Not all partners have unlimited financial
liability for the partnership debts
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Furnish more than one kind of product or
service
Selling goods and services to customers
Professional services
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Formed under state
or federal statures
that is authorized to
act as a legal person
Exists apart from its
owners
Can be taxed and
sued like an
individual
Owners have limited
liability—cannot lose
personal resources if
corporation fails
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Offer stockholders limited liability and a
share of the profits
Stockholders have no management
responsibilities
Can raise money by selling stock
Have an easier time getting credit
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Must comply with many more federal and
state laws
May pay more taxes
Taxes are monies paid
by corporations and
individuals and are
used to fund
government programs
and services, such as
highways and schools.
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Levied against a
business’s profits
Most important tax
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Levied against the
property, buildings,
or land owned by a
business
Based on an assessed
valuation of the
building or land
Amount that a piece
of property is worth,
according to a tax
assessor.
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Government requires
businesses to
withhold income
taxes from
employees’ earnings
and send them to the
federal government
Managers make
important decisions
because of taxes,
such as relocating
Intellectual
property
laws protect
the
inventions
and new
ideas of
business.
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The document the
federal government
issues to inventors
and companies that
gives them the
exclusive right to
make, use, and sell
their inventions for
17 years
When time is up,
others can begin
selling
Inventor of each type
of new product must
apply for another
patent
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A word, name,
symbol, or slogan a
business uses to
identify its own
goods and set them
apart from others.
Once owned, no
other company can
use it.
Good for 10 years,
can renew every
additional 10 years
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The protection provided
to creative work
Literary works, musical
compositions, plays,
dances, paintings,
movies, maps, and
computer programs
Owner the only one with
legal right to reproduce
the work, sell it, or allow
others to use it
Lasts the holder’s life
plus 70 years
After that, work becomes
part of public domain
In groups of three, design
a trademark for either a
real or imagined business.
What do you think daily like would
be like if government did not
regulate business in any way?
To protect consumers from unfair business
practices, the federal and state governments
have established consumer protection laws.
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Business treated you
unfairly?
Write a letter of
complaint to the FTC.
Will take action against
a company if it receives
enough consumer
complaints to establish
a “pattern of
wrongdoing”
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Used Car Rule requires
dealers to tell
customers important
information about a
used car
Telemarketing Sales
Rule helps protect
from being bombarded
with unwanted
telemarketing calls by
placing limitations on
companies
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Food and Drug
Administration (FDA)
protects against
problems wit mislabeled
and impure foods, drugs,
cosmetics, and medical
devices.
Approves all new drugs
before sold
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Fair Packaging and
Labeling Act requires
manufacturers of foods,
drugs, cosmetics, and
medical devices to clearly
label products with the
name of the
manufacturer, the
contents, and the
amount the package
contains.
Labels on packaged food
must provide complete
nutritional information.
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An agreement between
two parties to carry out a
transaction
Can be enforced in a
court of law
Must follow specific rules
to stand up in court
Often difficult to break
Must state parties agreed
and give the quantity of
goods involved
Contracts
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Often short, simple
documents that meet the
requirements of the
Uniform Commercial
Code
Managers involved at
every stage of
assembling and
reviewing contract
Ensure the right
information gets to the
people who make the
contracts
Business Sales Contracts
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Sorry Charlie: Starkist Must Compensate
Consumers
Summarize with 3-2-1 Review
◦ 3 Things You Learned
◦ 2 Things You Found Interesting
◦ 1 Question You Still Have
If there is a disagreement between two
businesses about what certain provisions in a
contract really mean, how should they resolve
their dispute?
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Regulates who can operate
a business and where
owners can set up shop
A way to limit and control
people who plan to enter
certain types of businesses
Government officials can
take away license from
business not complying
with laws and regulations
May also regulate through
building codes, which
regulate physical features
or structures of buildings
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Stan and Linda have a perpetual yard sale
business. They buy and sell used items, like
clothes, furniture, and tires, under an awning
in their front yard.
What government regulations are probably
being violated?
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Imagine you want to raise and sell organic
fruit.
Using the six areas of law, make a list of
question you will need answered to start this
business.
What kinds of business activities do you think
should and should not be regulated? Explain
your answer.
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How can the government enforce its regulations
against businesses?
List three types of business ownership.
Why should businesses be concerned about
taxes?
What kind of intellectual property law protects
an invention? A soft drink’s logo? A hit movie?
True of False: Consumer protection laws apply
to both individuals and businesses.
Why does a manager need to know exactly what
is contained in a business contract?
Ted Change is the government affairs manager
for Emerging Inc., a software firm in California.
He just found out that California has passed
two new laws. One law raises income taxes
from 30 t0 35 percent on company profits. The
other law restricts companies from selling
software to consumers without including
instructional guides in the packages. Ted’s
boss asks him to write a memo about the
effects the laws may have on the company.
Apply: Prepare a memo answering these
questions: If Emerging makes $100,000 in
profit, how much more in taxes will it have to
pay? What kind of law is the “how-to” guide
restriction. (Prepare in Word and Print.)