When a business idea comes up, people can join forces to create a more sustainable company. Founders can choose different forms of business depending on their desires and needs. However, some situations require close attention and understanding of the requirements for starting a business. In addition, it is essential to understand the consequences of each decision taken, since the safety and uniqueness of the idea of a future company or startup depend on this. This paper takes exceptional cases of Ted Brown, Jim Green, and their two sons, Theodore and James, aged sixteen and eighteen, respectively. Since Ted Brown and Jim Green want to create a joint business, but during the negotiations, they will both be out of town, they entrusted their sons with this. This article discusses whether Theodore and James can legally start a mobile attractions app business for families on vacation. In addition, the document focuses on what points should be considered when choosing a form for business development to ensure the most efficiency within its limitations.
From a legal point of view, Theodore Brown and James Green had the opportunity to open their own business, which their fathers began to discuss. However, it is necessary to follow a process that lawfully corresponds to the company’s official registration. To begin with, the two men decided to start negotiations regarding the development of the application and entrusted it to their two sons, who represented them. The latter can discuss the details of the application, as the relevant documents did not prohibit this. In addition, before being appointed negotiators, Ted Brown and Jim Green did not visit a lawyer to draw up a non-disclosure agreement. Otherwise, a patent for a business idea is a guarantor of protection against theft and its implementation by another entrepreneur unrelated to the project (Federico et al., 2020). In this case, it can be seen that Ted Brown and Jim Green did not bother to issue a patent before negotiating; respectively, their sons can implement it in detail.
Thus, even though the original idea belongs to their fathers, Theodore Brown and James Green can legally negotiate and formalize the business. The fathers could register a start-up business and its name as a trademark to avoid misunderstandings. The brand ensures the safety of the logo and the name of the product or service, which preserves the owners’ development (Federico et al., 2020). However, it is worth noting that if Theodore and James were appointed to negotiations, the presence of a trademark could serve as an obstacle. This is because the sons needed official documents from their fathers and help to establish a business. In addition, a hindrance is a copyright protection for all documents, including business development paths. Nevertheless, due to the need for more documents, the sons could provide information about the business their fathers decided to establish.
Since Theodore and James are the representatives of the fathers in the negotiations, they have some duties. A lack of official documents and a patent can lead to the theft of an idea. However, it follows that the business’s capital is held by Ted Brown and Jim Green and requires significant investments. Accordingly, after negotiations on the company’s details, the sons should report their outcome and discuss a plan for further development with the fathers. Since Theodore is a minor and James is eighteen, they cannot take out a loan for other company expenses. Age limits some people in their ability to take out business loans (Zhao et al., 2021). This leads Theodore and James to account for their ideas and decisions. Additionally, if they create a business, they must allocate a share to their fathers since this is done with their financial assistance. Thus, a stake in the industry and a report on the economic component of the business and development plan are the primary duties of the children of Ted Brown and Jim Green.
To choose a form of business, sons and fathers need to proceed from several factors. Firstly, it is necessary to focus on the financial situation of entrepreneurs and the possibility of attracting investments (Clarke & MacDonald, 2019). In addition, the profile factor plays an important role, so Theodore and James must consider their business’s specifics. Furthermore, it is essential to note the state’s requirements for organizations in the chosen form. Based on these data, the organizational and legal structure will allow for establishing the network of participation of the parties in business conduct. In this case, entrepreneurs can verify their legal status and officially register it. Moreover, they will establish the degree of their participation and responsibility in the business and separate the functions regarding management and financial activities.
The partnership business will be the most significant benefit for Ted Brown and Jim Green. First, this is due to the need for an income tax on the application they create. At the same time, each partner undertakes to provide an annual declaration regarding the share of income and loss made during the designated period (Tax information for partnerships, n.d.). An equally important advantage of the partnership form of business is the possibility of attracting credit funds to develop a startup. This gives partners broad access to resources they can use to raise capital. In addition, the advantages of the partnership form of business include a high level of trust between entrepreneurs and promptness in decisions. In the case of Ted Brown and Jim Green, this is the most appropriate option, as they can establish equal responsibility and financial investment in the project.
However, some disadvantages must be considered when choosing an affiliate form of business. The most important of these is joint and several liabilities, which will lead to problems for the other partner if one makes a mistake. At the same time, both depend on each other, which can lead to difficulties if one gets sick or decides to sell or go out of business (Clarke & MacDonald, 2019). This leads to a limitation of the independence of each entity and the inability to manage the company beyond the established limits. Moreover, there is a high risk of disagreements and compromise solutions that need to provide sufficient benefits to the enterprise. Partners are forced to make concessions to each other and bring the situation to a standard solution. Thus, Ted Brown and Jim Green must consider these shortcomings when formalizing the business.
In conclusion, it should be said that the sons of Ted Brown and Jim Green can negotiate on behalf of the fathers. However, since Ted Brown and Jim Green are financially responsible, Theodore and James must account for any ideas and decisions they make. In addition, to establish a business, entrepreneurs must consider financial factors. This follows that partnerships can be the most successful form of business. Even though such a strategy limits the independence of each subject, from the point of view of investments, it is the most effective.
References
Federico, G., Morton, F. S., & Shapiro, C. (2020). Antitrust and innovation: Welcoming and protecting disruption. Innovation Policy and the Economy, 20(1), 125-190.
Clarke, A., & MacDonald, A. (2019). Outcomes to partners in multi-stakeholder cross-sector partnerships: A resource-based view. Business & Society, 58(2), 298-332.
Tax information for partnerships. (n.d.). IRS. Web.
Zhao, H., O’Connor, G., Wu, J., & Lumpkin, G. T. (2021). Age and entrepreneurial career success: A review and a meta-analysis. Journal of Business Venturing, 36(1), 1-20. Web.