Sign Up Now
Get instant access to over 1 million+ study documents
OR
Already registered? click here to login
By creating your account, you agree to our terms of service, privacy policy and student honor code.
Entrepreneurship
What is a founders' agreement? Describe the purpose of a buyback clause and why it's important.
A founder's agreement is the 'founding' agreement of a corporation and defines the "the roles and responsibilities of the founding team, equity ownership and vesting and IP ownership" (Yaghmaie 2015). Defining what the founders' roles are is critical given that roles may vary over the course of a company's lifespan and can become a subject of dispute. "You'll need to allocate the ownership of your new enterprise amongst the founding team. While this is a subjective matter and can sometimes be very delicate, it is imperative that you nail down how you will split up the equity between the founding team upfront to make sure there are no misunderstandings or hurt feelings once things get off the ground" (Yaghmaie 2015). A buyback clause specifies that a founder that wishes to leave the firm must sell his or her shares to the remaining founders. The purpose of this agreement is to ensure that ownership remains within the control of those who began the original firm (Baron & Shane 240).
Part B: List and explain four (4) steps entrepreneurs can take to avoid legal disputes.
First and foremost, getting everything in writing is essential. Vague and...
The terms of firm ownership can be clearly stated in the founders' agreement; any contractual arrangement entered into by the company should be legal and in writing, whether the contract is with another firm or an employee.
There should be specific guidelines and policies for appropriate conduct, and also specific channels through which employees can deal with personal disputes, including those related to harassment. So should any privacy policies, such as when and if employees can expect to have emails monitored.
Finally, having clear ethical guidelines is also important. Not only should illegal conduct be avoided; the appearance of illegality should also be shunned.
IP (intellectual property) and the expectations surrounding IP (such as what the employee owns or does not own when he/she generates new ideas or products) should also be specified. "Getting IP assigned into the entity is simple and there are many forms available online that get this basic assignment accomplished. Do it on day one and don't wait too long" (Yaghmaie 2015). Issues pertaining to disclosure of company information should also be specified in employee contracts.
Part C: List and briefly describe three (3)…
References
Baron, R. & Shane, S. (2007). Entrepreneurship: A process perspective. Cengage.
Levenson, J. (2015). Piercing the corporate veil. Nolo. Retrieved from:
http://www.nolo.com/legal-encyclopedia/personal-liability-piercing-corporate-veil-33006.html
Moran, G. (2012). How to build and ethical business culture. Entrepreneur.
Retrieved from: http://www.entrepreneur.com/article/224453
Retrieved from: http://www.entrepreneur.com/article/236044
Business Limited Liability Corporation and Partnership Paper A limited liability company, normally called an LLC, is a business arrangement that merge the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation (Limited Liability Company (LLC) FAQ, 2012). The federal government does not distinguish an LLC as a classification for federal tax purposes. LLC's are well-liked because, comparable to a corporation, owners have limited personal liability for
Legal Structure of McDonald's Corporation There are many different categories of business in the world today. McDonald's brand franchisees operate as part of a corporation. The company, comprised in part of restaurants run by independent entrepreneurs, is currently considered one of the worlds most successful and largest franchising companies every created. Seventy percent of McDonald's restaurants are owned and operated by independent owners. This corporate business structure has resulted in substantial opportunities
XI. Conflict of Laws Principles The unique nature of corporations creates interesting problems in regard to determining where a corporation can be sued or where the corporation can decide to file its own cause of action. A corporation can also elect to avail itself to the courts in the state in which it is incorporated and can also be subject to service in such state as well but the issue is
Legal Structure of Business For a McDonalds franchisee, there are three options. The franchise can be operated as a sole proprietorship, a partnership, or a corporation. The real issue is not that there are options, but which option should be chosen. It is not always possible to make that determination easily, since there are many factors that have to be considered in each choice. A sole proprietorship is operated by one
Legal Business Form Implemented at Treme Legal Form of Business for Treme When an entrepreneur starts an industry, he or she should always have a vision of what their business should be like and in most cases, this is done through looking at the positives that will bring success and good fortune to the business. It is very essential for an entrepreneur to have information and know how to use good production
Partnerships demand that all partners (both general and limited partners) be on the same page financially and within the scope of the business operations. They require shared a goal and vision for the entity, and a mutual understanding of each owner's role and the parameters for exerting control. Perpetual lines of communication must be available for all parties in response to changing dynamics and the occurrence of unforeseen events. This