D432- HR Compliance and Employee Relations

sole proprietorship

a business that is established, owned, operated, and often financed by one person

Advantages of Sole Proprietorships

• easy and inexpensive to form

• profits all go to the owner

• direct control of the business

• no special taxation

• ease of dissolution

Disadvantages of Sole Proprietorships

• unlimited liability

• difficulty raising capital

• limited managerial expertise

• trouble finding qualified employees

• unstable business life

• losses are the owner’s responsibility

partnerships

an association of two or more individuals who agree to operate a business together for profit

written partnership agreement

A __, spelling out the terms and conditions of the partnership, is recommended to prevent later conflicts between the partners. Such agreements typically include the name of the partnership, its purpose, and the contributions of each partner (financial, asset, skill/talent).

general partnership

• all partners share in the management and profits.

• they co-own the assets, and each can act on behalf of the firm.

• each partner also has unlimited liability for all the business obligations of the firm.

limited partnership

• one or more general partners, who have unlimited liability,

• and one or more limited partners, whose liability is limited to the amount of their investment.

Advantages of Partnerships

• ease of formation

• availability of capital

• diversity of skills and expertise

• flexibility

• no special taxes

• relative freedom from government control

Disadvantages of Partnerships

• unlimited liability

• potential for conflicts between partners

• complexity of profit sharing

• difficulty exiting or dissolving a partnership

corporation

is a legal entity subject to the laws of the state in which it is formed, where the right to operate as a business is issued by state charter.

advantages of corporations

• limited liability

• ease of transferring ownership

• unlimited life

• tax deductions

• ability to attract financing

Disadvantages of Corporations

• double taxation of profits

• cost and complexity of formation

• more government restrictions

C corporation

is the conventional or basic form of corporate organization.

S corporation

• is a hybrid entity, allowing smaller corporations to avoid double taxation of corporate profits as long as they meet certain size and ownership requirements.

• organized like a corporation with stockholders, directors, and officers, an __ is taxed like a partnership.

• are allowed a maximum of 100 qualifying shareholders and one class of stock.

• the owners are not personally liable for the debts of the corporation.

cooperatives

• is a legal entity with several corporate features, such as limited liability, an unlimited life span, an elected board of directors, and an administrative staff.

• are autonomous businesses owned and democratically controlled by their members—the people who buy their goods or use their services—not by investors.

• empower people to improve their quality of life and enhance their economic opportunities through self-help.

buyer cooperatives

• combine members’ purchasing power.

• pooling buying power and buying in volume increases purchasing power and efficiency, resulting in lower prices.

• at the end of the year, members get shares of the profits based on how much they bought.

seller cooperatives

• are popular in agriculture, wherein individual producers join to compete more effectively with large producers.

• member dues support market development, national advertising, and other business activities.

joint venture

two or more companies form an alliance to pursue a specific project, usually for a specified time period.

franchising

is a form of business organization that involves a franchisor, the company supplying the product or service concept, and the franchisee, the individual or company selling the goods or services in a certain geographic area.

franchisor

the company supplying the product or service concept

franchisee

• the individual or company selling the goods or services in a certain geographic area

• buys a package that includes a proven product or service, proven operating methods, and training in managing the business.

franchise agreement

• is a contract that allows the franchisee to use the franchisor’s business name, trademark, and logo.

• outlines rules for running the franchise, services provided by the franchisor, and financial terms.

• agrees to follow the franchisor’s operating rules by keeping inventory at certain levels, buying a standard equipment package, keeping up sales and service levels, taking part in franchisor promotions, and maintaining a relationship with the franchisor.

Advantages of Franchises

• increased ability for the franchisor to expand

• recognized name, product, and operating concept

• management training and assistance

• financial assistance

Disadvantages of Franchises

• loss of control

• cost of franchising

• restricted operating freedom

What is a significant advantage of a sole proprietorship over other forms of legal business entities?

A sole proprietorship is simpler and less expensive to establish than other forms of legal business entities.

What is a significant advantage of being a limited partner versus a general partner?

A limited partner has a financial liability only equal to the amount they invested in the business.

In 2009, two popular automakers ended a relationship where they operated a factory together to produce an electric vehicle that they could then both sell.

Which type of business organization describes the relationship between the two automakers?

a joint venture

Where can a small business decide to incorporate?

A business of any size can incorporate in any state.

The United States Constitution

• pre-eminent source of American law; foremost law of the land.

• establishes the boundaries of federal law, and it must be followed by all citizens, organizations, and entities.

• empowers federal law making by giving Congress the power to enact statutes for certain limited purposes, like regulating interstate commerce.

common law

also known as judicial law which is derived from cases heard by courts, legislative law which is derived from state and federal statutes, and administrative law which comes from governmental agencies.

Bill of Rights

• the Constitution’s first ten amendments

• offers specific protections of individual liberty and justice.

• restricts certain powers of government.

case law

is used by judges to inform their own rulings.

precedent

previous court rulings on similar cases, when determining the ruling in their own cases.

federal law

• The Constitution empowers __ making by giving Congress the power to enact statutes for certain limited purposes, like regulating interstate commerce.

• preempts conflicting state and local laws.

• may only preempt state law if it is enacted within the limited powers that are enumerated and granted to Congress in the Constitution.

statutes

When a bill becomes a federal law, it is assigned a law number and prepared for publication by the Office of the Federal Register (OFR) of the National Archives and Records Administration (NARA). Public laws are also given legal statutory citation by the OFR and are incorporated into the United States Code (USC).

regulations

are standards and rules adopted by administrative agencies that govern how laws will be enforced.

local law

In addition to federal and state law, municipalities, towns or cities, and counties may enact their own laws that do not conflict with state or federal laws.

state law

States are empowered to create legislation that is related to matters not preempted by the federal Constitution and federal laws.

business law

• It primarily addresses issues related to the creation of new businesses, which arise as existing companies deal with the public, government, and other companies.

• consists of many legal disciplines, including contracts, tax law, corporate law, intellectual property, real estate, sales, immigration law, employment law, bankruptcy, and others.

business ethics

ethics outline the ethical model, or framework, that companies expect employees to follow when making these decisions, as well as the behavior that the companies deem acceptable.

contract

• The main function of a __is to document promises that are enforceable by law.

• The key to an agreement or __is that there must be an offer and acceptance of the terms of that offer.

employment and labor law

• is a very broad discipline that covers a broad array of laws and regulations involving employer/employee rights and responsibilities in the workplace.

• law includes worker protection and safety laws, such as OSHA, and worker immigration laws, such as the Immigration Reform and Control Act, which imposes sanctions on employers for knowingly hiring illegal immigrants.

antitrust law

• legislation includes both federal and state laws regulating companies’ conduct and organization.

• The purpose of such regulation is to allow consumers to benefit from the promotion of fair competition.

unfair trade practices

is broadly used and refers to any deceptive or fraudulent business practice or act that causes injury to a consumer.

the federal trade commission

investigates allegations of unfair trade practices raised by consumers and businesses, pre-merger notification filings, congressional inquiries, or reports in the media and may seek voluntary compliance by offending businesses through a consent order, administrative complaints, or federal litigation.

the security and exchange commission (SEC)

regulates securities on the federal level.

first amendment

Ensures that U.S. citizens have the right to freedom of speech, press, religion, and peaceable assembly. Provides citizens with the right to appeal to government to redress grievances.

second amendment

Establishes that the government cannot infringe upon citizens’ right to bear arms. Establishes the importance of a militia for national security.

third amendment

Establishes that the government cannot quarter soldiers in private houses during peacetime or wartime.

fourth amendment

States that government can only issue warrants with probable cause and protects U.S. citizens from unwarranted search and seizure.

fifth amendment

Establishes rights of due process. Ensures that indictment of a grand jury is necessary to put a citizen on trial and grants citizens the right not to testify against themselves.

sixth amendment

Provides citizens with the right to an expeditious public trial, the right to an attorney, and the right to an impartial jury.

seventh amendment

States that citizens have the right to a trial by jury for common lawsuits involving monetary value of $20.

eighth amendment

Prohibits cruel and unusual punishment, prevents the imposition of excessive fines, and states that the government cannot set bail at excessive amounts.

ninth amendment

States that the rights set out in the Bill of Rights do not remove any other rights granted to citizens.

tenth amendment

States that any area over which the federal government is not granted authority through the Constitution is reserved for the states.

free exercise clause

The __of the First Amendment states that government is prohibited from making laws that prohibit the free exercise of religion.

due process clause

states that the government cannot take an individual’s life, liberty, or property without due process of law.

Substantive due process

means that laws that will deprive an individual of his or her life, liberty, or property must be fair and not arbitrary.

procedural due process

means that governments must use fair procedures when depriving an individual of his or her life, liberty, or property.

takings clause

According to this clause, when the government seizes private property for public use, it is required that the government pay the owner just compensation for the property.

just compensation

compensation is understood to be equivalent to the market value of the property.

international law

is primarily governed by customs, treaties, and organizations that influence how laws are understood, interpreted, and enforced around the world.

the principle of comity

states that nations will defer to the laws and decrees of other nations when those laws are consistent with their own, essentially upholding reciprocity between nations with similar laws.

the act of state doctrine

is a law applicable in England and the United States. It states that these two nations will not pass legal judgement on public acts committed by a recognized government if those acts occur within that government’s own territory

the doctrine of sovereign immunity

states that foreign nations are immune from U.S. jurisdiction when certain circumstances are applied.

shaming

is a deliberate attempt to negatively impact a state, regime, or governmental leader’s reputation by publicizing and targeting violations of international laws, including customary norms, treaty breaches, and violations of organizational expectations

The concept of legal precedent is fundamental to the American legal system. (true or false)

true

The U.S. Constitution is the most important founding document of the United States and lays out the fundamental powers of the federal government. (true or false)

true

Federalism establishes the ability of states to enforce laws alongside the U.S. Constitution. Under what circumstances are states able to enact their own individual constitutions?

Under the 10th Amendment of the Constitution, states can enact laws in areas that are not restricted to the federal government.

An American business operating in the United Kingdom contracts with a local business for goods and services to be provided for the American business's headquarters in the United States. The contract was drawn and concluded in the United Kingdom, under U.K. law. After a dispute arises, the U.K. business sues the American business in a U.S. court and seeks the U.S. courts to enforce the U.K. based contract.

Assuming that the U.K. business is correct in this dispute and the U.S. business is in the wrong, would a U.S. court be able to enforce the terms of the contract?

Yes. The contract would be enforceable by U.S. courts unless the contract violates a specific U.S. law or legal principle.

Which major source or sources form the basis of international law?

It is a combination of international treaties, customs, and organizations.

interstate

between states

intrastate

within each state

white collar crimes

• are characterized by deceit, concealment, or violation of trust.

• they are committed by business professionals.

• they generally involve fraud, and the employees committing the crimes are motivated by the desire for financial gains or fear of losing business standing, money, or property.

fraud

• is the intentional misrepresentation of material facts for monetary gain.

• this type of crime is not dependent on threats or violence.

pump-and-dump scheme

Once the value of the stock was raised, shares are released into the market.

ponzi schemes

• (also known as pyramid schemes) are investing scams that promise investors low-risk investment opportunities with a high rate of return.

• the high rates are paid to old investors with money acquired from the acquisition of new investors.

larceny

occurs when a person unlawfully takes the personal property of another person or a business.

embezzlement

occurs when a person has been entrusted with an item of value and then refuses to return it or does not return the item

antitrust laws

do not allow activities that restrain trade or promote market domination.

monopolies

• the control of one organization over a specific market.

• monopolies reduce competition and, as a result, can have a detrimental impact on consumer prices.

racketeering

• activities include loan-sharking, money laundering, and blackmailing.

• in the past, the term has been used to describe organized crime.

bribery

occurs when monetary payments, goods, services, information, or anything of value is exchanged for favorable or desired actions.

money laundering

refers to taking “dirty”money, or money obtained through criminal activities, and passing it through otherwise legitimate businesses so that it appears “clean.”

spamming

unsolicited emails

torts

are wrongs committed against others who suffer some form of damage as a result.

tortfeasor

The actor of the wrongs has historically been called a __.

tort law

seeks to address this damage based on the circumstances of the issue

intentional torts

occur as the result of a conscious and purposeful act

negligence

occurs when an individual does not exercise duty of care

assault

is an intentional tort that occurs when an individual has a reasonable apprehension of an intentional act that is designed to cause harm to himself or herself, or to another person.

malicious prosecution

occurs when an individual files groundless complaints to initiate a criminal matter against another.

defamation

• occurs when an individual intentionally creates and promotes malicious falsehoods about another.

• can occur in two ways: slander and libel.

slander

is in effect when falsehoods are spoken

libel

occurs when falsehoods are expressed in written or other recorded forums

invasion of privacy

involves the unwanted production of negative public information

negligence

is decided by determining the duty of the defendant, whether or not the defendant committed a breach of that duty, the cause of the injury, and the injury itself.

duty of care

responsibility to act, based on the reasonable standard in a situation