Advantages and Disadvantages of Business Models

Welcome. This is the fourth written assignment in BL 480. Before you begin the assignment, re-read the sections of the course syllabus (see class webpage) dealing with “Written Assignments” to ensure that you understand the format (cover page plus no more than two type-written double spaced pages, content of the cover page, Code of Honor statement, etc.). You will be graded both on your response to the assignment (substance) and on having followed the directions (procedure). The issues are fairly narrow and will allow you to apply your knowledge of negotiable instruments. Verbiage will not be rewarded but the thoughtfulness and thoroughness of your response will be.


Written Assignment #4: Kyle has survived his recent financial crisis, is enjoying an upturn in business and has sorted out his life insurance issues. He wants to take a look at Alabama Sunshine and the new product line, Alabama’s Best Foods, and has been imagining how the business should be organized in the future. Although Alabama’s Best Foods has recently expanded to stores in Mississippi, when the business was started, the principals were Kyle and his father, Kyle-the-elder. Kyle was single and had no dependents. He had just graduated from UNA and had a good foundation in business. But that was several years ago and Kyle has gotten a bit rusty from his days basking in the glory and knowledge gained in BL 480. He now has a spouse and young children and is concerned about the future of his family and the continued growth potential of his business. And, his father, who had always managed the financial operations of the business, is elderly, having all but retired. Kyle never was too keen in accounting so he has been using a local Fayette bookkeeping service run by a fellow in his church who used to operate a crop dusting service, Don C. Nutton, who tells Kyle “Don’t worry. Trust me. You’re earning more than you’ll spend. What do you have to worry about?”


Although the business has been run as a family-owned venture, Kyle knows that he must plan for tomorrow, that he wants to keep Alabama Sunshine expanding, and that he has to look out for the interests of his children. He knows that you are up-to-date on the pros and cons of the basic business structures and seeks your advice. He asks you why one business organizational model would be better than another? What factors should he consider? What steps should he take and what issues might he face? Should he issue shares of Alabama Sunshine and, if so, what kind? What questions do you need answered and what questions would his “accountant” need to be able to answer?


note :To help you organize your thoughts, I suggest that you read the fact set; decide which facts are relevant and which are merely verbiage; based on the information in Unit 4, decide which legal information is relevant to the facts; then state the issues (relevant facts), state the general rule of law, and apply the law to the facts, taking the issues one at a time. WA4 is neither as difficult nor as involved as WA3 but does have a mix of major and minor issues.

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