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Legal Issues in Constructing Business Models

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Legal Issues in Constructing Business Models

For this assignment you must write a three page paper discussing the legal issues and likely outcomes for all of the scenarios provided below. Make sure to provide a complete answer and address all of the issues that you see as well as the specific questions asked for every scenario.

1) Paul Peters is an inventor. He has various creative inventions that he thinks will make him a lot of money if he markets them right. His best friend Ronald Robinson has a Bachelor degree in Marketing, an MBA, and has innovative ways of marketing products. Paul does not have a lot of money, but his cousin Sara Sanders is millionaire after hitting it big with the house boom and knowing when to stop investing. Paul thinks that with his inventions, Ronald’s business skills, and Sara’s money, they can make it big. Paul decides to create a business with these individuals and asks you for help with the details. You must give him advice on what is the best business for him to form? Why? Make sure to include a description of the business model that would be best for him, as well as a description of the other business models and why they would not be as good as the one you advised him. Also make sure to cover all of the steps that he must follow in order to form that particular type of business.

2) Paul, Ronald, and Sara have already formed their business as you have recommended and are rapidly prospering. Paul is upset because other individuals have been attempting to follow in his footsteps and are creating similar businesses. Paul has decided to lose some money in the process, but to sell his items so cheap, that no one can compete with him. He hopes that that way he could veer off his competitors and then substantially increase the prices so that he can make up for the loss profits. Can Paul do this? Why or why not?

3) After ten years, Paul decides that he does not want to continue the business. The company has incurred a substantial amount of debt, it owes the manufacturer of the products, a company called WeDoItAll, over $20,000.00; it owes the bank (Inventors Bank) about $28,000.00, and the company owes Sara, who has made the company many loans to stay afloat a total of $18,000.00.Paul thinks that bankruptcy might be the best solution. As an advisor to Paul, you must (1) explain to him how to dissolve the business (what steps he must take); and (2) give him advice as to whether bankruptcy is a good solution for his company.

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