Write a 2–page executive briefing of a selected federal or state court case pertaining to the topic of business entities.
By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies and assessment criteria:
Competency 1: Articulate the importance, context, purpose, and relevance of law in a business environment.
Summarize the facts and ruling of a legal case.
Competency 4: Evaluate legal options for creating a business entity.
Analyze how a legal case could impact businesses.
Explain how a legal case could impact a specific organization.
Competency 5: Develop information literacy skills as applied to business law.
Exhibit information literacy skills as applied to business law.
For this assessment, you will first select an actual business-related legal case, pertaining to the topic of business entities, based on briefly conducting associated research. Based on that, you will then select an organization that you believe would be impacted by that legal case. Having completed both of these tasks, you should assume you’re a senior manager in the organization you selected, and that you were asked to perform an analysis of the legal case and to write an executive briefing for the executive team of that same organization. Your executive briefing should include a summary of the case, as well as an evaluation of how the case impacts the organization.
The purpose of this format is two-fold:
To give you the opportunity to research and investigate a real court decision.
To challenge you to think about the business implications of the case, and specifically how the case will impact an actual organization.
In your case law analysis you must be able to navigate the court’s decision, and summarize and evaluate it. You may choose any business-related court case, either state or federal, as the basis for your case law executive briefing, as long as the case is applicable to the assessment topic. You are expected to conduct your own independent research to locate and evaluate the applicability of cases. A few appropriate case law websites are recommended for you in the Resources, but you are not limited to using cases from these sites.
For this assessment, use credible legal research databases and online resources, research federal and state court cases, and select any business-related case that has been decided by a state court, a federal court, or the United States Supreme Court. Then select an organization (potentially the organization for which you work) that you believe the selected case might impact. Write an executive briefing that addresses the following:
Research federal and state court cases pertaining to the topic of business entities. Select one court case and write an analysis that addresses the following:
Articulate the context and relevance of law in a business environment:
Identify the parties who are before the court.
Provide a brief background and context associated with the case. Summarize the facts in no more than 2–3 paragraphs.
Identify the specific disagreement between the parties.
Explain the ruling of the court and its business relevance in no more than 1–2 paragraphs. Was there a dissenting opinion? If so, explain why some of the judges or justices disagreed with the majority in the decision.
Evaluate the business impact of the case:
Summarize your analysis of how the case will impact businesses in general, including both positive and negative impacts.
Indicate the organization you selected as potentially impacted by the case and why you selected that organization.
Explain how the case will impact the specific organization you selected, such that the executive team will understand the implications of the legal decision.
Based on your executive audience, your executive briefing should be no more than two pages, and should be well organized and written in clear, succinct language. Follow APA rules for attributing sources that support your analysis and conclusions.
Academic Integrity and APA Formatting
Read the following document for important information related to the following topics:
Why the Form of Business Entity Is Important.
The Notion of Limited Liability.
Corporations and Piercing the Corporate Veil.
Agency – What It Is and What It Is Not.
Why the Form of Business Entity Is Important
The fundamental question that surrounds the creation of any business is what type of corporate form, or legal entity, the business should construct itself as. This is a question with significant consequence: the business form that an organization assumes can dictate not only how much tax the entity will pay, but also what protections the law will provide the leadership of the business organization.
Litigation and the threat of litigation—often seen by business law observers as one of the most detrimental threats in the commercial world—can be mitigated significantly by the form of business entity an organization assumes.
No discussion about business entities would be complete—or even informed—without addressing corporate taxation. The choice of business entity form has tremendous implications regarding state and federal taxation upon business earnings, but many types of entities are coupled with onerous tax reporting requirements. There is an ongoing political debate in Washington and in state houses around the country about appropriate corporate taxation levels.
An organization’s choice of business entity will have long-term ramifications upon the financial stability of the business, and the ability of those organizations to compete in an ultra-competitive global economy. Consider the competing entities that business might embrace, and the implications and rationale for choosing one over another.
The Notion of Limited Liability
Some small businesses do not incorporate into a formal business entity; for the purposes of taxation, these are considered sole proprietorships. In a sole proprietorship, a business pays taxes as if business income is personal income. Significantly, a sole proprietorship requires no separate tax filing and does not require visiting the Secretary of State’s office in any state capital. The entrepreneur or entrepreneurs are relived of the burdensome IRS reporting requirements that those who form partnerships and corporations must adhere to.
On the other hand, those who operate as a sole proprietorship assume significant and serious liability, should the business entity be sued. Damages awarded from just a single lawsuit can cripple a once-thriving business. For that reason, many entrepreneurial organizations have chosen limited liability corporations (LLCs) or limited liability partnerships, which—while imposing greater administrative burdens on management—provide a powerful and durable shield for corporate officers from litigation concerning the acts of the partnership or corporation. There is little question that the major attraction for forming a corporation or partnership is to mitigate personal liability for those who lead the entrepreneurial entity. The surging growth of the LLC, for example, is testament to the belief of many businessperson that success in an ultracompetitive business environment is tied closely to addressing the omnipresent risk of litigation and lawsuits.
Corporations and Piercing the Corporate Veil
Another fundamental issue is how the courts treat decisions made in the corporate boardroom. Unless corporate officers engage in demonstrable malfeasance or gross negligence in the execution of their official duties, state and federal courts have consistently upheld the integrity of the decision-making process among corporate executives. This legal concept, known as the business judgment rule, requires the courts to provide maximum deference to corporate officers in decisions made as part of their official duties, and this deference will not be interfered with unless there is a strong public policy rationale for doing so.
The public policy rationale for protecting corporate decision-making is that if every decision reached by a corporate board or executive officer was open to successful challenge by shareholders or other concerned parties, then no corporation will be able to execute business decisions in a way that could mitigate risk and ensure long-term financial stability and growth. For example, when a company’s share price nosedives, shareholders usually challenge the integrity of boardroom decision-making, even bringing litigation against the corporate board. While many of these decisions are settled out of court, it does display some of the serious and chronic litigation minefields that threaten the financial integrity of entrepreneurial interests. It is for this strong public policy reason that the courts will only challenge corporate decision-making—or pierce the corporate veil—in extraordinary circumstances when there is a very strong public policy rationale for penalizing the organization.
Agency – What It Is and What It Is Not
Many businesses rely upon agents who act, operate, and communicate on behalf of the business organization. In a time when independent contractors are relied upon more than ever, and where many businesses have decided to outsource a wide variety of jobs that were once exclusively done in-house, the importance of the agency relationship is perhaps greater today than it has ever been. Given that modern reality, it is important to consider the business context of agency and the risks and challenges involved in that vital and legally significant relationship. Business leaders should know exactly what agents can and cannot do in the context and scope of their relationship with the employer, and what duties and rights agents have towards business organizations.
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