Ted Brown and Jim Green

Ted Brown and Jim Green

Can Theodore Brown and James Green legally create the business that Ted Brown and Jim Green have been discussing? Why, or why not? 

Ted Brown and Jim Green want to form a partnership, which is an association of two or more individuals collaborating as co-owners of a business and sharing profit. Theodore Brown and James Green cannot legally create the business that Ted Brown and Jim Green have been discussing because Theodore Brown is now a partner in the business and is only representing his father, Ted Brown, who is out of town. Theodore Brown is also not legally recognized as a partner in the business Ted Brown and Jim Green are forming because he has not contributed anything to the business. Theodore Brown also lacks a basic understanding of the business because he has not been part of the discussions between Ted Brown and Jim Green in forming the business.

If Theodore and James do create the business, what duties do they each owe their father? Describe what those duties mean in this case.

If Theodore and James create a business, their father will be an indirect business partner because he was part of developing the business idea. One of the duties that Theodore and James owe their father is profit sharing. Ted is entitled to a share of the profit the business generates because he helped them come up with the business idea being used to create the profits and may be consulted when making decisions about the design and implementation of the app. The second duty is to involve him in decision-making and update him on any decisions made about the app so that he can assist them in making the right decision for business success. The third duty is to protect information about the business. Theodore, James, and Ted may sign a non-disclosure agreement, which is an agreement between business partners and those involved in business operations not to disclose the business idea or share business information with third parties. Theodore and James also must maintain an open line of communication so that no information about the business is disclosed. According to Lehavi (2017), the success of a business partnership is dictated by good communication. The authors add that committing to good communication, responsibility, and transparency is essential in the initial stages of selecting the right partner and in later stages as partners continue working together to enhance the success of the business and determine if the chosen partner is fit for the job. In the case study, Ted needs to be informed about Theodore and James’s performance to determine if their performance contributes positively or negatively to the business and recommend appropriate changes to ensure the company is booming.

 What factors do Ted Brown and Jim Green (or their sons on their behalf) need to consider in selecting a form for this business?

One of the factors that Ted and Jim or their sons need to consider when selecting the form of business for their business is the scale of operations. According to Chee (2017), the scale of operations is the size of business operations. It is determined by the maximum output a business can yield. A sole proprietorship is often preferred when the scale of operations is small, while a partnership is selected when the scale of operations is neither too large nor too small. Ted Brown and Jim Green or their sons need to evaluate their business operations based on their business’ market share, which in turn relies on the amount of goods and services demanded. The second factor is capital requirements. Currently, Ted and Jim do not have enough capital to start and run the business. Therefore, they may opt to form a partnership so that they can pull funds together and raise the money required. The third factor is business stability. Fogel (2013) argues that the strength of a business is dictated by the flow of suppliers and the demand for products and services. If Ted and Jim are assured of high business stability, they may opt for a partnership so that they can raise enough funds to secure the business by hiring competent workers. The fourth factor is the ease of formation, which is defined by the expenses to be incurred in forming the company and legal requirements.

What form of business will provide the most advantage for their venture?

A partnership will provide the most advantage to Theodore Brown and James Green’s business venture. To begin with, it will enable the business partners to raise the capital needed for the business together and pull resources, hence opening the company within the shortest time. The two can also collaborate, and each draws their strategic connections to get the resources required to start and maintain the venture’s business operations. A partnership will also provide the most advantage for the business venture by bridging the gap between knowledge and expertise, hence increasing the chances of business success. According to Lehavi (2017), every business partner has a different level of expertise needed to run the business. Therefore, working together as a team to complete business activities promotes the exchange of knowledge and ideas, thus improving business operations. A partnership will also provide an advantage by enabling the business partners to start the business as soon they have enough capital to run the company because it has fewer formal requirements and fewer legal obligations. The business partners will also share the burden of running business operations and the financial burden of ensuring that all the resources required to maintain business operations are acquired. Given the fact that the venture is new, there may be various challenges, such as limited market shares at the beginning, hence the need for mutual support among the business partners so that they can keep the business running despite the challenges.

What are the disadvantages of the form of business that they selected?

The main disadvantage of a partnership is the likelihood of conflict and differences between the partners. Running a new business requires tolerance and commitment. If there is no equal obligation among the partners, disputes and differences may arise because the committed partners may feel that they are doing too much. According to Lehavi (2017), differences and conflicts may also arise from differences in the strategic direction that the venture should go, how to handle private business issues, and how partners should be rewarded. The second disadvantage is slower decision-making. Partnerships require the involvement of all partners in the decision-making process. The unavailability of one partner could cause delays in decision-making. Partners also have to agree on one decision, and this may take a long time if one of the partners is not willing to accept the proposed decision. The third disadvantage is that every partner is liable for the debts of the business even though the obligations are a result of a partner’s actions. The fourth disadvantage is difficulty in the transfer of ownership because it includes a complicated process that requires the partners to evaluate assets and negotiate the terms that had been agreed upon when forming the partnership. Another disadvantage is uncertainty because the insolvency, insanity, death, and retirement of a partner may lead to sudden business closure. Partnerships also suffer from unclear authority because, in most instances, the business partners do not have clarity on their responsibilities in running the league.

References

Chee, W. W. (2017). Sales operations for small businesses: How to scale your business with sales Str. Createspace Independent Publishing Platform.

Fogel, K. (2013). Ample business stability and social welfare.

Lehavi, D. (2017). Business partnership essentials. https://doi.org/10.1515/9781547400188

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Ted Brown and Jim Green have been discussing going into business together for several months, and they are anxious to start that business before the end of this month. However, both Ted Brown and Jim Green have to be out of town for several weeks at another company, so Ted Brown has told his son, Theodore, who is 16, about the discussions with Jim Green and has appointed Theodore to complete the negotiation of the final details of the business. Jim Green has told his son James, who is 18 years old, about the discussions with Ted Brown and appointed James to complete the negotiations.

Ted Brown and Jim Green

The business that Ted Brown and Jim Green want to create will develop an app for cell phones that will identify family-oriented attractions along major highways so families can download the app to help in planning family vacations. The development of the app will take four months, and then it will take approximately another four months to deploy the app entirely. As the app becomes popular, the business will solicit family-oriented companies to advertise on the app. Ted Brown and Jim Green have very little capital to use in the development and deployment of the app and will probably need to raise the money necessary to develop and deploy a quality app.

In your case study, address the questions below.

• Can Theodore Brown and James Green legally create the business that Ted Brown and Jim Green have been discussing? Why, or why not?
• If Theodore and James do create the business, what duties do they each owe their father? Describe what those duties mean in this case.
• What factors do Ted Brown and Jim Green (or their sons on their behalf) need to consider in selecting a form for this business?
• What form of business will provide the most advantage for their venture?
• What are the disadvantages of the form of business that they selected?

Be sure to use APA formatting for all citations and references. Please note that no abstract is needed.