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The Legal Aspects of Owning and Transferring Personal and Real Property

In business world especially in marketing, there is emphasis on the four Ps: Price, Product, Promotion and the Place. Place generally involves delivering products close to the customers or an area where the customers can easily access them. Place for the business is critical especially for young businesses that need to grow. However, “location on its part is more than just choosing a building” (Allen, n.d). In the United States, the running of business varies depending on the location in which it operates, while ownership of property (real or personal) is influenced by legal requirements of the location, more so because various states have different regulations and requirement for acquiring and holding property. In addition, the location of the business in different states is influenced by the social and economic aspects, for example, different cities have different rent rates, and tax regimes, labor inequality, and demographic patterns among other factors. Other aspects to put in consideration in relation to location and ownership of property include business location relative to the streets, parking or other businesses, whether the business need to have an office, individual’s perception and view of the location, the frequency of customers to the business, the strategic partners, the cost, the convenience, both the business and customer safety, traffic, facility requirement, zoning and of course the prestige accompanying a particular location (Allen, n.d). This paper will evaluate legal aspects of owning and transferring personal and real property, as well as the insurance and environmental issues in relation to location of business in the states of Florida, Indiana and New York.

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Florida State

In the state of Florida, all real and personal property belonging to all people who reside in the state is taxable and one is only exempted from the taxes if so specified (Anon, 2007). The real property is assessed in accordance to its site in the taxing jurisdiction and the municipality in which the business is located. Exemptions and exclusions are normally provided for certain classes of property or classes of taxpayers including; enterprise zone property, goods-in-transit, imports and exports, property used in interstate commerce, inventories, temporary present property and the present construction work in progress. In addition, in conducting assessment and valuation in order to get the taxable amount, the Florida state follows the following steps: the current cash value of the property, the maximum and best use estimated for the property in the immediate future and the current use, the location of the property, the size of the property, the cost of the property and the present replacement value of any improvements on the property, the condition of the property, the income from the property and the net proceeds of the sale of the property after deduction of all reasonable fees (Anon, 2007).

Florida State is one of the states in USA with the highest number of insured people, for instance, it is ranked the fifth in auto insurance premiums and third in homeowners’ insurance premiums in USA (Netquote, n.d). Basically, the determining factors for insurance premiums in Florida have largely been its size, the distinctive weather, geography, and the varied demographics of the State. Florida’s propensity for natural disaster is the highest as it has the highest density of lightening strikes, more tornadoes per square mile than any other state, and more than 80 per cent of its population lives in flood-prone areas. Moreover, Florida usually gets hit by more hurricanes than any other state; all these risks have forced the insurance premiums in Florida to go up (Netquote, n.d).

Indiana State

The Indiana property tax is compulsory on all real and personal property that is not specifically exempted. The property taxes in the State of Indiana are growing at a faster rate, for instance, in the year 2005, businesses paid almost half of all property taxes in the State. Nevertheless, this has relatively changed as a result of the exemption of the inventory tax and tax abatements, and the adoption of the market value-in-use system; indeed, currently businesses are no longer paying as much property taxes as they once did (Indiana Association for Community Economic Development-IACED, 2008). Moreover, Indiana is continuing to face a severe increase in property taxes due to the changes in the property tax appraisal system and property tax relief which tend to vary from year to year.

Generally, personal property is assessed based on valuation standards that address valuations of inventories, depreciatable property and other items (Baker and Daniel, 2003, p. 40). Real property on the other hand is assessed using statewide general reassessments that address new construction, improvements or other changes impacting the assessed value of the property (Baker and Daniel, 2003, p. 41).

New York State

Small businesses starting off in New York State are not necessary under the law required to have liability, property damage or other types of business insurance. However, it becomes difficult to operate without this insurance coverage. Among the crucial insurance covers for the businesses include the general liability insurance and the property insurance; however in some selected cases, life insurance is also important (Empire State Development Division for Small Business-ESDDS, n.d).

Starting a river-rafting business

Generally in the USA, the approximate minimum investment capital for the river-rafting business is $100,000 for a viable and sustainable business although sometimes there may be slight difference in accordance to particular States (Stuart and Lefebvre, 2003). The river-rafting business is subject to the Commercial River Rafting Safety Act, which is mandated to license, outfit, and set out safety and operating standards, and each outfitter permit lists the particular rivers where commercial operation are authorized (Stuart and Lefebvre, 2003). Every business person is required to have information of the rafting safety standards pertaining to the use of lifejackets, helmets, wetsuits, guide certification and equipment requirements. Moreover, commercial river rafting needs to have a valid guide’s license and the license need to take first aid training (Stuart and Lefebvre, 2003).

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Doing business in Indiana State

Doing business in Indiana State has been found to the cheapest as compared to other States (Indiana Economic Development-IED, n.d). According to the 2007 statistics on cost of doing business, Indiana was ranked the cheapest, with total cost of doing business being $179,199 compared to New York where the cost of doing business was $420,130 (Indiana Economic Development-IED, n.d). More so, Indiana has “no gross receipts tax or inventory tax” (Indiana Economic Development-IED, n.d). Also, according to the State’s sources, Indiana’s general working environment is ranked seventh best in USA and the State has greatly “reduced the regulatory barriers to development by streamlining the permit process” (INDIANA, n.d).

Factors to consider in identifying the best location

In locating the best position for the river-rafting business, the investor needs to consider the following factors: first, the size of the business – how large the business is going to serve the clients and if the business equipment is going to sustain the potential expected number of the customers. Secondly, the investor needs to understand the state’s regulations acts pertaining to the business. This ensures that the necessary requirements are met in accordance to the State’s laws. Thirdly, the investor needs to understand the weather and the general geographical condition of the States, for example, the weather aspects have greatly affected the insurance premium rates.

In Florida, it has been identified as the most risky state to do business and hence insurance rates are high; the frequent tornadoes and waves also have impacted negatively on river rafting businesses and therefore few investors will be interested in the area. In New York, the cost of doing business is relatively high and therefore unfavorable to the new investors. The fourth aspect requires consideration of the property acquisition rights and the taxes incurred on such properties. Some States have numerous payments on the personal or real property; in Indiana, there are some numerous deductions and tax exemptions especially to new and small businesses as compared to other states.

Conclusion

Location is important to the survival of any business venture. While many investors may put a lot of emphasis in the physical factors, a thorough understanding of the regulatory environment in terms of laws, insurance requirements, property acquisition and ownership need to be considered. This will ensure any decision arrived at is cost effective, environmentally fit and viable.

References

  1. Allen, S. (n.d). Choosing a location for your business: there is much to consider than just cost. 
  2. Anon. (2007). Spotlight on Florida. Property Tax Alert, Vol. 13, No. 3. Riverwoods. Web.
  3. Baker and Daniel. (2003). Guide to doing business in Indiana. Indianapolis.
  4. Empire State Development Division for Small Business-ESDDS. (n.d). Starting your small business: Insurance.
  5. Indiana Association for Community Economic Development-IACED. (2008). Indiana property taxes. Is property tax relief or tax restructuring the solution?
  6. Indiana Economic Development-IED. (n.d). Community Profile-Indiana Business Environment: Cost of doing business comparison.
  7. INDIANA. (n.d). The Right Business Environment.
  8. NetQuote. (n.d). Don’t Get Swamped by Florida Insurance.
  9. Stuart, G. and Lefebvre, P. (2003). Land based ecotourism: river rafting/ canoeing/ kayaking.

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StudyCorgi. (2021, November 24). The Legal Aspects of Owning and Transferring Personal and Real Property. Retrieved from https://studycorgi.com/the-legal-aspects-of-owning-and-transferring-personal-and-real-property/

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StudyCorgi. (2021, November 24). The Legal Aspects of Owning and Transferring Personal and Real Property. https://studycorgi.com/the-legal-aspects-of-owning-and-transferring-personal-and-real-property/

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"The Legal Aspects of Owning and Transferring Personal and Real Property." StudyCorgi, 24 Nov. 2021, studycorgi.com/the-legal-aspects-of-owning-and-transferring-personal-and-real-property/.

1. StudyCorgi. "The Legal Aspects of Owning and Transferring Personal and Real Property." November 24, 2021. https://studycorgi.com/the-legal-aspects-of-owning-and-transferring-personal-and-real-property/.


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StudyCorgi. "The Legal Aspects of Owning and Transferring Personal and Real Property." November 24, 2021. https://studycorgi.com/the-legal-aspects-of-owning-and-transferring-personal-and-real-property/.

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StudyCorgi. 2021. "The Legal Aspects of Owning and Transferring Personal and Real Property." November 24, 2021. https://studycorgi.com/the-legal-aspects-of-owning-and-transferring-personal-and-real-property/.

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StudyCorgi. (2021) 'The Legal Aspects of Owning and Transferring Personal and Real Property'. 24 November.

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