This document should be approximately 10 pages in length, double spaced, one-inch margins, excluding charts and exhibits. Please make sure all sources are properly cited using APA style. The document should cover the following legal aspects:
A. Law Firm number and group members
Law Firm number 3
· Reinaldo Barcelo Monroy
· Yenni Curbelo
· Jonathan De Los Santos
· Asoris Marrero Porta
· Romy Martinez Bermudez
· Rachel Salmon Rodriguez
B. Capital structure (meaning, who contributes the equity and how much) REY
C. Management of the business, decision making, and operation of the business, REY
D. Sharing of profits/losses YENNI
E. Liability: What liabilities will the business and the owners have if they get sued? How and where would they defend any legal actions? YENNI
F. Duration JONATHAN
G. Transferability of interests JONATHAN
H. Taxation ASORIS
I. Assess the level of competition and profit opportunities ASORIS
J. Employment issues. Who is going to work the business? Does the business have employees or independent contractors? Is the company obligated to provide benefits? Does the company need an employment manual? ROMY
K. Licensing and regulations: Identify what licensing and regulatory requirements impact your business and how you are addressing them. ROMY
L. Contractual questions to consider: RACHEL
I. Dispute resolution
IV. Choice of law/forum
V. Release of liability
Overview of the Business
Loli Bakes, a healthy, specialized, sit-down artisan bakery in Miami with Cuban history, is preparing to launch a new concept that will enable customers to indulge in the boundless bliss of eating a Pastelito or any other great dessert without feeling guilty. Due to this formation, a Limited Liability Company (LLC) with six members will be created. Our offerings include cakes, cupcakes, and dessert shots, with the Pavlova dessert being a particular favorite of our customers. Because we are intimately aware of the negative impact that additional sugar has on our customers’ diets, we prefer to provide sugar-free sweets to guarantee that we are assisting them in maintaining their chosen healthy living routine. Second, our goods were created with the vegan consumer in mind. This implies that we recognize and respect each individual’s right to choose their own food choices. To meet our well-known vegan population, we have increased our menu choices to include non-meat delights and cuisines. Given these considerations, the following is a high-level explanation of the business strategy followed throughout its development and subsequent execution.
Loli Bakes will be formed as a limited liability company (LLC). Each member will contribute a set amount to the equity, as determined by the agreement signed or the financial resources accessible to each member. The company intends to draft an agreement defining the many sources of finance available and the percentages each source will contribute to the overall goal. In this arrangement, the business can obtain capital via member contributions, which serve as the primary source of financing. Furthermore, since the company is established as an LLC, in that case, it may acquire bank loans and loans from other institutions, which will be subject to a set rate of interest during repayment installments. Because the business plan implies that the firm would have a favorable economic impact on the local community, the company will have no trouble obtaining loans from banks and credit unions (Lipton, 2017). Finally, since the firm is an LLC, it will allow interested trustable friends to receive a portion of the company’s profits at the end of each year at the agreed dividend rate.
Loli bakes intends to start with a budget of roughly $10,000 to cover operational costs and get the company off the ground. According to the concept, the members are entrusted with creating an equivalent amount that will account for 60% of the total capital contribution in this budget. As a result, the fact that each of the six members was previously the own owner and now wants to cooperate and combine efforts to construct something even more fantastic serves as a positive boost to our image and a simple way of acquiring revenue for the firm. Based on the capital projection contribution summary shown below, Loli Bakes is confident in its ability to launch its first firm, which will eventually grow into a major investment.
Management of the business, decision making, and operation of the business
Loli Bakes LLC. will be founded by six members, each with an equal portion of the company’s ownership. Each owner will take on managerial responsibilities, enabling the company to save money while also laying the framework for future growth and staff needs. Members will be allowed to vote on various future choices that the company may confront. The decision will be based on a majority vote, four members out of six, to reduce the likelihood of arguments. Furthermore, the firm will write an operating agreement that will be advantageous to the business and assist in the organization’s smooth operation (Mancuso, 2021). Furthermore, this agreement will protect the members by showing that the company is a separate legal entity, preserving the LLC’s asset protection clause.
Loli Bakes will be separated into six distinct sections, each managed and directed by a different stakeholder who will be held responsible for operational efficiency and product quality. Finance, marketing, research and planning, operations, procurement, and customer relations will be among the departments inside the firm (Mancuso, 2021). The finance department’s responsibilities in financial operations include ensuring that appropriate and timely money is available for corporate operations, ensuring that creditors and suppliers are paid on time, and coordinating revenue and cost monitoring.
The marketing department will be in charge of building and maintaining the Loli bakes brand. Campaign management for marketing activities and the creation of marketing and promotional materials are all part of these responsibilities (Mancuso, 2021). To assist the business, the research and planning department will be responsible for corporate and strategic planning, conducting research, and maintaining statistical data and information up to date with market conditions.
The operations department will guarantee that the Loli Bakes production process goes smoothly from beginning to end and resolve any difficulties throughout the manufacturing process. Because the procurement department will not monitor everything necessary for a successful operation, such price will be as cheap as possible. The third step will include collaborating with the customer relations department to resolve concerns with particular consumers while enhancing the firm’s overall customer satisfaction score. As a result of implementing this management structure, Loli Bakes will run more efficiently and effectively.
Sharing of profits/losses
As shown in the capital contribution pane, each owner will contribute $1,000 of their own money to the startup of the business and will get an equal share of its earnings and the option to reinvest the profits in the business as shown in the profit-sharing pane. Loli Bakes LLC is legally structured as a limited liability company to protect the four proprietors in the case of a large debt or the firm’s insolvency (Lipton, 2017). On the other hand, the company will adjust its profit-sharing ratio to equal the equivalent capital contribution made by each member if some members decide to reinvest their profits in the business in the future, resulting in one partner’s capital contribution being greater than the capital contribution made by the other partners.
At the end of each fiscal year, the finance department will give members a report showing the detailed breakdown of activities and profits earned over the preceding year. Additionally, the proposed dividend rate will be followed for preferred friends of the company, who would receive 10% of Loli Bakes’ initial capital contribution every year. However, the corporation will not impose any limits on any member willing to reinvest their dividends in the business and therefore increase their contribution to the company’s capital (Mancuso, 2021).
First, Loli Bakes acts as a distinct legal entity from its owners as a limited liability corporation. When business owners create an LLC, they bear exclusive responsibility for the amount of money invested in the company. This means that whether settling corporate obligations, declaring bankruptcy, or filing a lawsuit, the members’ assets will be safeguarded to the greatest extent possible. Creditors are normally prohibited from seizing the personal property of LLC members (Molk, 2017).
Even though an LLC has limited liability, such protection may be revoked if it engages in unethical commercial practices. Creditors may seize a limited liability company’s money or property to fulfill a judgment against it if the LLC is determined to be responsible for the carelessness or misconduct of its owner or an employee (Molk, 2017). On the other hand, the LLC owners would not be personally accountable for the debt. A co-owner of an LLC who was not engaged in the behavior or crime, on the other hand, would not be personally accountable, although a shareholder who committed the act would be.
The corporation will seek legal advice from its legal department, which will act as its defender if the company is exploited for illegal conduct that risks the assets or money of the members or any other parties. If the LLC is sued, a judgment against it might put the company into bankruptcy or lose all its assets. Similarly, suppose the complaint is based on the firm’s actions, such as carelessly hurting a client. In that case, the plaintiff may be able to sue a member personally if the insurance company fails to reimburse the plaintiff for their losses (Molk, 2017). To ensure that the company’s responsibility to its members is maintained as limited, experienced legal counsel will be required.
Loli Bakes will often be taxed as a pass-through corporation since it is a limited liability company. This implies that the LLC is not obliged to pay taxes on its commercial profits, but Loli Bakes owners must pay taxes on their portion of the LLC’s earnings. State or local governments may levy additional LLC taxes. As a result, each LLC member is individually responsible for taxes on the LLC’s earnings in proportion to their ownership share in the LLC (RRder, 2017). As a result, the Loli Bakes tax rate is determined by the individual income tax rates of the members. The company may choose to file its taxes as a C corporation by completing IRS Form. If the company chooses to register as a C corporation, the company will file as a C corporation (RRder, 2017). Tax evasion will be strictly forbidden in this business since it may lead to legal issues between the company and the government. As a result, Loli Bakers will embrace the tax-paying system and comply with all tax regulations.
The Internal Revenue Service will not regard an LLC as a separate entity for tax purposes, which means that the IRS will not collect taxes directly from the LLC (at least initially). Loli Bakes will decide to be classed as a partnership to avoid double taxation on its earnings. The firm’s earnings will be dispersed to the members, and we will subsequently be liable for our income taxes.
Level Of Competition and Profit Opportunities
According to industry analysis, there are several Cuban bakery possibilities in Miami. While some of them provide a few nutritious meals, none of them prioritizes health or environmental sustainability. Loli Bakes provides a one-of-a-kind marketing concept in addition to healthy Cuban and worldwide cakes and treats. According to our poll, residents of Miami are worried about the health consequences of ingesting harmful compounds such as corn flour and cane sugar. According to the company, these challenges will be solved by innovatively exchanging healthy conventional components for hazardous conventional components (Lipton, 2017). According to our analysis, Loli Bakes has little competition, implying it will have no trouble expanding its market share and consumer base. Furthermore, our prices will be higher than traditional bakeries to stress the exceptional quality of our dishes, which will be comparable to those of other local healthy eateries. This will guarantee that the company generates enough income to stay in business.
Contractual Questions to Consider:
a) Dispute Resolution
In the event of a dispute between parties, the parties in the dispute shall first obey the following steps as follow:
1. Dispute Resolution Insurance; The Parties involved in the dispute shall first deliver a detailed document with all the reasons and evidence regarding the notice of dispute, Loli Bakes LLC shall evaluate the information given and resolve the problems of the parties involved.
2. Process of Dispute Resolution Insurance; After the notice of dispute is provided to Loli Bakes LLC by the parties involved, a seven day evaluation process shall begin. A meeting shall be scheduled after the evaluation process to discuss and resolve the problems of the parties involved.
Products elaborated by Loli Bakes LLC have a 100% refundable policy in the case of allergies caused from our pastries . We will immediately replace the ingredients causing the illness and we will send a new order free of cost to the buyer. Shipping and handling will be assumed by Loli Bakes LLC. Illness or allergies means anything that jeopardizes the health or safety of our customers.
Products elaborated by Loli bakes LLC are made to satisfy the expectations and needs of our customers. Loli LCC is dedicated to meeting all safety and health requirements required by law. If customers or affiliates have any questions or recommendations, our customer service teams are available 24/7.
d) Choice of Law
The following Agreement of purchase shall obey the laws of the state of Delaware. A seven day refund and return time frame is provided free of charge by Loli Bakes LLC to our customers starting the day that the products are purchased. Any other disputes follow the guidelines provided in our dispute resolution Insurance and process.
e) Release of Liability
In the case of any liabilities relating to injuries or damages that may occur while using our products, iFridge LLC will not take responsibility for any losses from injuries the customer may have.
· Lipton, P. (2017). The introduction of limited liability into the English and Australian colonial companies acts Inevitable progression or chaotic history?. Melb. UL Rev., 41, 1278.
· Mancuso, A. (2021). Form Your Own Limited Liability Company: Create an LLC in Any State. Nolo.
· Molk, P. (2017). Protecting LLC Owners While Preserving LLC Flexibility. UCDL Rev., 51, 2129.
· RRder, E. (2017). Combining Limited Liability and Transparent Taxation: Lessons from the Convergent Evolution of GmbH & Co. KG, S Corporation, LLC, and Co. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.2968296