Excellent business idea
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- Students must mention question number clearly in their answer
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Requirements: 1100-1400
Ahmad and his friend, A.G. Pennypacker, have come up with a great idea: they have
developed a fluor elastomer liner (a rubber lining) for oil tankers. With this
innovation, they believe they can eliminate most oil spills that result from tanker
accidents. The liner is highly resistant to fluctuations in temperature as well as
physical punctures.
Ahmad wants to set up a company, but is unsure of his options and has come to you
for advice for the type of business entity formation he should select. He has the
following concerns:
1. He does not want his other business concerns being held liable should there be
a lawsuit arising from use/sale of this product.
2. He wants an entity form that will minimize his tax liability.
Based on the entity forms detailed in Chapter 35, select one you feel satisfies his
concerns. Make sure to explain why it is the best for Ahmad and Pennypacker.
Action Items
1. Read the case study above.
2. By the due date, submit your answers to the case study questions. Justify your
Answer previewwhich provides members of a corporation with a layer of legal protection (Mancuso, 2021). This aspect is provided for in Wyoming’s Limited Liability Act. Under Article 17-29-304, Ahmad will not be personally liable for any contracts entered into by the LLC for the sale or use of the elastomer liner. Due to this, when a lawsuit is brought against the LLC, Ahmad’s other businesses will not incur any liability emanating from the lawsuit. In addition, Ahmad will be liable only to the extent of his capital contribution during the formation of the LLC. Despite this protection, the Article also outlines a couple of circumstances whose existence might prompt a court to attach personal liability to Ahmad for the LLC’s debts and obligations. These circumstances include; fraud, insufficient capitalization, failure to adhere to the LLC’s formalities established under the Statute, and intermingling of personal[1292 Words]
Excellent business idea
