TERM PAPER

You have a business idea and are looking for someone to invest in it. Your investors would like to know about the legal issues facing your new business. They have asked you to prepare a memorandum with the following information and analysis.

Identify and select an idea for a new business. Decide on the business, what it will do, who will it serve, how many employees it will have (have a minimum of 10 employees), and where it will be located and do business (needs to be located in the United States). Decide on a business name, the form of the business entity, and the place of organization. Then, prepare a short summary of the major legal issues the business will have to address in order to get up-and-running and through the first few years of its operations. This page provides a series of questions to consider in writing the paper and the grading criteria.

It is not to be a business plan discussing operations, financing and marketing. I want enough information to understand your business setup but the meat of your paper should address legal issues. Make sure that you cover every area of law that we have studied in this course and will apply to this business. Don’t be concerned with issues that will not impact your business. For industry specific issues, try looking at the trade associations that cover the industry. As always, please feel free to email me for guidance.

The final analysis should be in business memo form to the attention of your instructor. It should be 3-5 pages, single-spaced, 12pt Times New Roman font, with 1″ margins. These guidelines (Links to an external site.) are a good overview of how to write an effective memo.

Term Paper Structure & Issues

To-Do Date: May 11 at 11:59pm

You should visit the State of Ohio’s “Starting a Business” website (Links to an external site.). This website will help you organize your term paper.

Use these headings to structure the paper (don’t include what is in parentheses in the heading itself):

• Short Overview of Business (incl. type of legal entity (with rationale), # employees)
• Contract Issues & Contracts Needed
• Employment & Safety Issues
• Environmental Issues
• Consumer Law Issues
• Warranty Issues
• Intellectual Property Issues
• Real Estate Issues
• Bailments & Found Property
• Cyberlaw/Digital Privacy Issues
• Insurance Needed & Liability Risks
• International Issues
• Financing Means (explain legal issues if borrowing money)
• Ethical Considerations
• Succession Planning (how will you pass on the business or wind it up if you die unexpectedly?)
• Legal Issues Unique to Your Business (do some research)

If a section doesn’t apply to your business, just say so and move on.

The following are some key questions to ask about your business. However, I want the paper structured under the headings given above.

Modules 1 & 2

1. Ethics – what specific ethics issues will you face?’
2. International law – will you be dealing internationally and, if so, how will you address the trade and contract issues addressed in the text?

Module 3

1. Tort liability – what liability risks will you face?
2. Cyber law – what issues will you face with your online presence? Will you have a website, social media, and an information management system accessed online (i.e. a database)? What privacy issues will you face?

Modules 4 & 5

1. Will you use employees or independent contractors, or a combination of both? If ICs, why do they meet the criteria?
2. What activities will you use agents for (e.g. finding raw materials)? What is the liability exposure?
3. Will you have an employee handbook?
4. Will you exceed the number of employees that will trigger various laws? If so, which one’s?
5. What specific workplace safety and wage & hour issues will you face? Minors? Overtime?
6. What kind of Title VII, ADEA, ADA and other discrimination issues might your business realistically face?
7. How will you deal with any discrimination claims?
8. What hiring issues might you realistically face?
9. Is your industry one in which unionization is common? If so, how will you deal with union activities

Modules 6 & 7

1. Pick a type of business entity (sole proprietorship, S corporation, C corporation, LLC, general partnership, LLP, limited partnership, or professional corporation). Also, if you plan to franchise the company at some point, describe your plans and the major legal issues involved.
2. Decide on your entities’ place of business; and any licensing or registration that will be required under state law.
3. If the entity is a corporation, I want to know the state of incorporation.

Modules 8 & 9

1. Think through the different contracts you will need in your business. What are the various transactions you will engage in? Suppliers, key employees, clients, contractors, equipment acquisition and maintenance, marketing, cleaning, credit cards, etc. Note: I am NOT looking for a discussion about unilateral, bilateral, express, and implied contracts, etc.
2. Are there any impediments that may be an issue in your business (e.g. minor capacity)?
3. What contractual risks will you face in your business and how you will protect yourself? For example, for restaurants, you would want a time certain date in the contract regarding delivery of food. For some businesses, you want an exculpatory clause or limitation on damages.
4. Will you need non-competes or exculpatory clauses? If so, how do you make them valid?

Module 10

1. Will you take sell/buy with other merchants (Article 2 issues)?
2. Will you offer express warranties (or be covered by them) and how will implied warranties impact you?
3. Will you obtain bank financing and have to put assets up as collateral (Article 9 issues)?

Modules 11 & 12

1. Discuss what antitrust issues you could possibly face and how you would deal with them. In other words, how could anti-competitive behavior be likely used against you in your business?
2. How will you sell and advertise your products and services? Which legal issues will you face?
3. Will you extend consumer credit? Which legal issues will you face?
4. Will you extend any written warranties or be on the consumer end of warranties?
5. Will sell consumer products and which safety issues could arise?
6. What environmental issues will you have to address in your business (go through each area and see how it will apply)?
7. How will you address the relationship with your accountant and the financial controls you will have on your business?

Modules 13 & 14

1. What kind of intellectual property will you have that will need to be protected, and how will you do so? Think through any trademarks, copyrights, patents, and trade secrets.
2. If you are a place open to customers, how will you handle found property?
3. If you are going to ship materials and products, what common carrier issues will you have?
4. Are you going to buy or lease? What legal issues will you face with that decision?
5. What land use, zoning, and ADA issues will you have?

Grading Criteria:

1. Do you cover all relevant issues pertaining to your business?
2. How well do you explain each relevant issue?
3. Do you state which areas do not apply to your business (good)? Conversely, do you cover issues that are not relevant to your business or spend too much time discussing issues that could be dealt with in a sentence or two (not good)?
4. Is it a legal memo, as opposed to a business plan?
5. Do you make a persuasive case in explaining the legal issues so that I will not walk away from the deal because of a legal risk?
6. Are you clear in your writing? Is your grammar and sentence structure correct? Do you clearly break out your ideas in sections and paragraphs? Is it easy for me to read and understand?