Four friends went into business together operating a night market, holding big events in a local city every two weeks. Each of the friends contributed $2,000 in cash for start-up capi
Four friends went into business together operating a night market, holding big events in a local
city every two weeks. Each of the friends contributed $2,000 in cash for start-up capital, expecting a 25% interest in the company.
– Adam had the business idea and asked Betty, Camala, and Duane to be part of the business. Adam was unemployed at the time and was available to work on the events 100% of the time.
– Betty had a part-time job, but quickly decided to quit and work for the company full time.
– Camala was 6 months pregnant and was available to help when the company started but soon had the baby and plans eventually to go back to her job as an independent contractor.
– Duane had a full-time job and would only be able to provide limited support, mostly in marketing the events.
The friends used a generic online legal form to create an LLC as equal members but did not create an operating agreement because the state didn’t require one.
By the third event the markets had already become popular and were bringing in a lot of money.
Adam and Betty started to push “buyouts” on Camala and Duane, suggesting that Camala and
Duane were somehow bad friends to expect 25% of a company they were not going to work at.
Adam and Betty have now basically hijacked control of the company, blocked access to bank
accounts, business documents, accounting, and funds to anyone but themselves. Camala and
Duane have not seen a dime of the profits. Adam and Betty seem to only want to talk about their
original buyout offers of $5,000 for Camala, and $8,000 for Duane, with no ongoing ownership.
While the facts may vary, such casual business startups among friends or family are common.
This scenario demonstrates all the things that can go wrong without proper planning.
Question:
If these friends had come to you before starting the business, how would you have advised them?
Include in your analysis:
– What steps should have been taken before money changed hands?
– Is an LLC the best option? Some form of partnership? Other options? Explain your choice thoroughly.
– While the friends each initially contributed cash, how should they value the non-cash contributions of time and labor in determining ownership shares, distribution of profits, etc.?
– Was an operating or partnership agreement necessary? What should have been included?
Support your analysis with at least 3 scholarly sources other than the course materials, cited in-text and in a reference list. You must also integrate Biblical worldview analysis.
This paper must contain at least 800 words and follow current APA format but does not require an abstract. The title page, abstract (if you include one), and reference list do not count towards the length requirement.
Criteria Ratings Points
Content/ Analysis
56 to >51 pts
Advanced
All issues are addressed and questions answered.
Major points are supported by all of the following: • Pertinent, conceptual, or personal examples; • Thoughtful analysis (considering assumptions, analyzing implications, and comparing/contrasting concepts); • At least 3 scholarly sources, in addition to the course materials, cited in current APA format; and • Integration of at least 2 biblical principles with citations.
51 to >46 pts
Proficient
Most issues are addressed and questions answered.
Major points are supported by most of the following: • Pertinent, conceptual, or personal examples; • Thoughtful analysis (considering assumptions, analyzing implications, and comparing/contrasting concepts); • At least 3 scholarly sources, in addition to the course materials, cited in current APA format; and • Integration of at least 2 biblical principles with citations.
46 to >0 pts
Developing
Some issues are addressed and questions answered.
Major points are supported by some of the following: • Pertinent, conceptual, or personal examples; • Thoughtful analysis (considering assumptions, analyzing implications, and comparing/contrasting concepts); • At least 3 scholarly sources, in addition to the course materials, cited in current APA format; and • Integration of at least 2 biblical principles with citations.
0 pts
Not Present
Few issues are addressed and questions answered.
Little or no analysis of key issues.
Or paper is not submitted.
56 pts
Grammar/ Spelling
10 to >9 pts
Advanced
Correct spelling and grammar are used throughout the thread. There are 0–2 errors in grammar or spelling that distract the reader from the content.
9 to >7 pts
Proficient
There are 3–5 errors in grammar or spelling that distract the reader from the content.
7 to >0 pts
Developing
There are 6–10 errors in grammar or spelling that distract the reader from the content.
0 pts
Not Present
There are more than 10 errors in the grammar or spelling that distract the reader from the content OR there is evidence of a complete lack of spell-checking and proofreading.
10 pts
Paper Grading Rubric | BUSI561_B02_202340
Criteria Ratings Points
APA Citation Compliance
10 to >9 pts
Advanced
References are cited both in-text and in a reference list. There are 0–2 minor errors in APA format in the required citations.
9 to >7 pts
Proficient
References are cited both in-text and in a reference list. There are 3-5 minor errors in APA format in the required citations.
7 to >0 pts
Developing
There are more than 5 errors in APA format in the required items and/or required citations are missing.
0 pts
Not Present
Required citations do not exist, or demonstrate no APA formatting or structure.
10 pts
Word Count 4 to >3 pts
Advanced
The minimum word count of 800 words of substantive content is met or exceeded.
3 to >2 pts
Proficient
Substantive word count is between 600 and 800 words.
2 to >0 pts
Developing
Substantive word count is between 400 and 600 words.
0 pts
Not Present
There are fewer than 400 words of substantive content.
4 pts
Total Points: 80
Paper Grading Rubric | BUSI561_B02_202340
,
BUSI 561
PAPER: BUSINESS FORMATION ASSIGNMENT INSTRUCTIONS
Four friends went into business together operating a night market, holding big events in a local city every two weeks. Each of the friends contributed $2,000 in cash for start-up capital, expecting a 25% interest in the company.
· Adam had the business idea and asked Betty, Camala, and Duane to be part of the business. Adam was unemployed at the time and was available to work on the events 100% of the time.
· Betty had a part-time job, but quickly decided to quit and work for the company full time.
· Camala was 6 months pregnant and was available to help when the company started but soon had the baby and plans eventually to go back to her job as an independent contractor.
· Duane had a full-time job and would only be able to provide limited support, mostly in marketing the events.
The friends used a generic online legal form to create an LLC as equal members but did not create an operating agreement because the state didn’t require one.
By the third event the markets had already become popular and were bringing in a lot of money. Adam and Betty started to push “buyouts” on Camala and Duane, suggesting that Camala and Duane were somehow bad friends to expect 25% of a company they were not going to work at.
Adam and Betty have now basically hijacked control of the company, blocked access to bank accounts, business documents, accounting, and funds to anyone but themselves. Camala and Duane have not seen a dime of the profits. Adam and Betty seem to only want to talk about their original buyout offers of $5,000 for Camala, and $8,000 for Duane, with no ongoing ownership.
While the facts may vary, such casual business startups among friends or family are common. This scenario demonstrates all the things that can go wrong without proper planning.
Question:
If these friends had come to you before starting the business, how would you have advised them?
Include in your analysis:
· What steps should have been taken before money changed hands?
· Is an LLC the best option? Some form of partnership? Other options? Explain your choice thoroughly.
· While the friends each initially contributed cash, how should they value the non-cash contributions of time and labor in determining ownership shares, distribution of profits, etc.?
· Was an operating or partnership agreement necessary? What should have been included?
Support your analysis with at least 3 scholarly sources other than the course materials, cited in-
text and in a reference list. You must also integrate Biblical worldview analysis.
This paper must contain at least 800 words and follow current APA format but does not require
an abstract. The title page, abstract (if you include one), and reference list do not count towards
the length requirement. Submit your paper as a Word document.
Submit your paper by 11:59 p.m. (ET) on Sunday of Module/Week 7.
Note: Your assignment will be checked for originality via the Turnitin plagiarism tool.
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