Before beginning work on this week’s discussion forum, please review the link “Doing Discussion Questions Right,” the expanded grading rubric for the forum and any specific instructions for this week’s topic.
The discussion assignment consists of two parts. Select one of the questions for Part 1 and answer Part 2.
By the due date assigned, submit your answers to Part 1 and Part 2 to this Discussion Area. Post the answers to both parts in one thread. Label your answers Part 1 and Part 2, but do not repeat the scenario text in your responses. Start reviewing and responding to your classmates as early in the week as possible. You should review and critique the work of other students as outlined in the expanded rubric by the end of the week.
Discussion Question Part 1
Select one of the scenarios listed below and explain the best solution for each. Include comments related to any ethical issues that arise. You should locate at least one scholarly source from the SUO Library or one case that has been decided or is currently pending to support your answer.
Scenario 1 – Liability on Negotiable Instruments
Porter Cable hired a bookkeeper, Gerald Smith, and gave him general authority to issue company checks drawn on First Bank so Smith could pay employees’ wages and other company bills. Smith decided to cheat his employers out of $9,500 by issuing a check payable to Timkin Bearings, one of the suppliers of bearings. Smith does not intend for Timkin to receive any of the money, nor is Timkin entitled to the payment. Smith endorses the check in Timkin’s name and deposits the check in an account that he opened in Sunny Bank in the name “Timkin Bearing Co. Sunny Bank accepts the check and collects payment from the drawee bank, First Bank. First Bank charges Porter Cable’s account $9,500. Smith transfers $9,500 out of the Timkin account and closes it. Porter Cable discovers the fraud and demands that their account be re-credited.
Scenario 2 – Negotiable Instruments
Ginny DeWitt borrowed $30,000 from SunTrust Bank to pay for her first year of college and signed a promissory note that required payments to start six months after graduation or the student fails to enroll in at least one-half of the full time load. Ginny dropped out of college to pursue her passion of opening a gift shop. When Ginny failed to pay the debt, SunTrust transferred the note to First Bank in New York. New York Bank obtained a court order allowing it to garnish Ginny’s wages and her federal income tax refund. Ginny filed a lawsuit seeing to avoid the payment, claiming the debt was not valid because she did not sign any documentation promising to pay First Bank. She also argued that the note lacked consideration.
Scenario 3 – Holder in Due Course
John Haley hired Mary Black as a bookkeeper at Florida Dental Center, Inc. Haley fired Black when he learned that she embezzled more than $200,000 and did not pay over $150,000 in state and federal taxes owed by the business. Haley said that if Black did not repay the embezzled funds, he would notify law enforcement. Black started working as a bookkeeper for Senior Daycare, a business owned by her father. Without proper authorization, Black wrote a check to Florida Dental for $175,000 out of Senior Daycare’s account and deposited the check directly into Florida Dental’s checking account. Black told Haley that the funds were a loan from her family so she could repay Florida Dental. Haley used the funds to pay the back taxes owed. Two years later, Black’s father discovered her theft and sued both Haley and Florida Dental for conversion because Black did not have authority to take the funds.
Discussion Question Part II
Using the business you created in Week 1, select three topics from the list below and explain how your business will handle issues related to the topics.Justify your answers with relevant laws, cases, or examples.
My created Business
The company’s name is Coffee Kettle. The product that I selected is food and beverages. The company is a corporation since it expanded its operation into 64 countries and has acquired other companies, for example, Seattle’s Best Coffee, and Ethos Water. The corporation is a type of business organization whereby the investors buy shares of stock to represent their ownership, (Wolfe, 2019). Some of the advantages of corporation structure include limited liability. The shareholder is only liable up to the amount of investment. It is easy to raise capital since the company can sell shares to the public.
There is no limit to the existence of cooperation since one can pass ownership from one generation to another. Some of the cons of corporate structure are that Income can be taxed twice since the corporation pays taxes on income, and the shareholder’s dividend is taxed. Another disadvantage is excessive tax filling. The legal requirement for forming of corporation business in my state includes a registered agent. The owner should fill the certificate of incorporation with the state. The state requires that the incorporator’s address, name, and signature be included, (Stout, et al., 2016). The corporation should include the number of shares of stock they wish to authorize.