Question

The questions all relate to the following fact pattern:

Two gentlemen walk into your CPA office and tell you that they wish to start a business. The facts as they relate them to you are as follows:

The two men are brothers named John and Bill Harris. John has developed a secret recipe for beer battered fried walleye nuggets. Bill has lots of money and is interested in starting a business with his brother but has no experience in the restaurant field and no interest in learning. Bill just wants to supply the money and eat nuggets.

John has decided to call the business “The Tasty Nugget” and has found a place recently vacated by another restaurant at Newport on the Levee. John is willing to do all the work including using his secret recipe, starting the business and running it so long as Bill supplies all the money. They have agreed to split any profits 60/40 in favor of John. They have also agreed that John will handle the day-to-day decisions but both brothers must agree upon all major decisions regarding the business. The brothers having taken a CPA Law course decided that they wish to create a LLC and you have sent them to a very competent attorney. An LLC was created using the name Tasty Nugget, LLC.

Question 1.

The Tasty Nugget is up and running and now John has come to you and wants you to help him draw up an employment contact for the employees of the Tasty Nugget. Specifically, the type of employees that John is concerned about are the cooks, waiters and managers. Please outline the items that you believe a contract for employment for the employees of The Tasty Nugget should contain. Include what individuals would be signing the contact, noting any titles that should be used. You should indicate what authority each of these employees have when acting on behalf of the business. Should all employees sign a contract? Some? None?

Question 2.

The Tasty Nugget is starting to get a cliental and as of July 31, 2017 was starting to show a small profit. Before any monies could be distributed the business hit a snag. Prior to the opening of the restaurant, Bill Harris loaned the business several thousand dollars for equipment and took a purchase money security interest in any equipment that was purchased with that money. John used the money to buy a stove from the now defunct restaurant The Bamboo Club for $500.00.

Bank One had loaned money to The Bamboo Club when it first opened in 2013. The purpose of the loan was to purchase equipment for The Bamboo Club including the stove that now is used to cook mouth-watering walleye nuggets at The Tasty Nugget. The loan to Bank One was never paid off and Bank One has a recorded security interest on the stove. Bank One has come to The Tasty Nugget and wants the stove turned over to them as they claim a superior interest in the collateral.

Bill is asking your opinion as to what you think he should do with the stove. Should he give it to Bank One or not? Explain the priority rules for conflicting security interest and how they apply to this situation. What advise do you give to Bill?

Question 3.

Once the stove issue was resolved the business started to boom. Not only did the restaurant have customers waiting for hours to get a table but also local businesses had started to order larger carry out orders.

One-day Billy’s Organic Farming Co-op ordered $300.00 worth of nuggets. When the employee of Billy’s Organic Farming Co-op – a summer intern - came to pick up the nuggets there proved to be a problem with payment. The intern only had a check made payable to Billy Bob Thornton, the stage name of Billy Johnson in the amount of $300.00. He had been told by Billy Johnson (the owner of Billy’s Organic Farming Co-op) to use the check for payment. The check was signed on the back “Billy Bob Thornton AKA Billy Johnson”.

The manager at the Nugget took the check as payment but asked the intern to sign the check with “Pay to the order of the Tasty Nugget”. The intern did as he was asked and received the nuggets in return.

The check bounced - a stop payment order had been placed on the check. Billy’s employees had gotten food poisoning from the nuggets and Billy Johnson refused to pay for what he considered tainted food. To make sure The Tasty Nugget didn’t get paid he called the drawer of the check, John Adams and asked him to stop payment. Mr. Adams did as requested.

Is the check a negotiable instrument? Was it properly endorsed? Discuss order and bearer paper issues. Can John Adams be made to pay the check? Who is primarily liable and secondarily liable on the check? Completely discuss all issues presented.

Answer 1

1)

An employment agreement is Associate in Nursing agreement that covers the operating relationship of an organization Associate in Nursingd an worker. It permits each parties to obviously understand their obligations and also the terms of employment.

Let’s begin with the utilization contract. There area unit a couple of things Tasty nuggest LLC should embody to assist shield each new rent and business once creating employment supply.

Here’s what employment agreement ought to include:

1. Job info

Some key items of knowledge to start out with embody the work title and also the team or department with that the worker can work. justify however performance are going to be evaluated and to whom the new rent can report.

2. Compensation and edges

Outline the compensation and edges package. It ought to embody the annual earnings or hourly rate, info concerning raises, bonuses, or incentives and the way these could also be obtained. justify what the advantages arrange includes — medical, dental, eye care, etc. — what % the leader pays, and what % the worker pays. If offered, embody info concerning the 401(k) arrange, stock choices, and any fringe edges.

3. Time off, sick days, and vacation policy

Thoroughly justify the break day policy.

How many vacation days area unit accumulated per pay period?

Do vacation days increase with long tenure?

Also justify your expectations concerning sick days, family emergencies, or unpaid leave.

Can workers compose hours by operating late and weekend events?

4. worker classification

Define whether or not the new rent is Associate in Nursing worker or contractor to make sure tax and insurance compliance. Uber has featured several lawsuits thanks to employment misclassification and continues to fight it. Learn what distinguishes workers from contractors, and classify workers properly right from the start thus you won’t need to worry.

5. The schedule and employment amount

The contract ought to clearly state if employment is current or for a group term. It ought to additionally embody once the worker is predicted to figure to outline the employer-employee relationship.

Include the number of hours the worker is predicted to figure and any versatile operating choices like performing from home or remotely whereas out of city. If the work needs operating nights and weekends, justify once and the way usually.

6. Confidentiality agreement

Protect sensitive info like business trade secrets and consumer knowledge by having the worker sign a confidentiality agreement inside the contract. rather than creating this a separate contract or piece of paper, embody it as a locality of the utilization contract and place a field within the section wherever new hires will sign digitally.

7. A technology privacy policy

Clarify what’s OK and what’s not concerning the utilization of social media and email on company property. as an example, if you don’t wish workers to use company computers or mobile devices to update their personal social media channels or check personal email, say so. If you don’t wish workers locution something negative concerning work on social media, like these 2 McDonald’s workers did, disallow it.

8. Termination terms and conditions

Explain what's needed for either party to terminate the connection, as well as the number of notice needed and if it ought to be written.

9. Severance or outplacement arrange info

It’s a touch early to be considering this, however must you or the worker attempt to half ways in which, you’ll wish to try to to thus nicely to keep up a positive leader whole. take into account providing severance or Associate in Nursing outplacement arrange.

10. needs once termination

The contract ought to embody Associate in Nursingy restrictions or mandates on an worker once effort the organization. as an example, Associate in Nursing worker might not be allowed to start out his or her own business within the same trade inside identical scene in an exceedingly such period of time or work with the business’s purchasers severally. Clearly, outline these terms to assist shield your business and its purchasers.

A written contract could be a good way to obviously outline the role, the responsibilities, and also the edges to forestall any confusion.

Be sure to rigorously browse all parts of Associate in Nursing employment agreement before linguistic communication it. confirm that you simply area unit comfy with each a part of the agreement. If you break the contract, there may well be legal consequences.

If you are unsure concerning any of the contract details, get recommendation from Associate in Nursing lawyer before you sign it thus you do not bind yourself to Associate in Nursing unfavorable agreement.

It's important to create certain you're able to uphold each a part of the legal instrument. as an example, if the contract needs you to remain at the work for a minimum amount of your time, confirm you may be able to accommodates the necessity.

Also, if the contract places limits on wherever you'll be able to work upon effort the corporate, take into account whether or not or not you're comfy with this limitation.

Tasty lump LLC ought to use the title that says itself i.e. "Tasty lump LLC Employment Contract"

The Contract should be signed by all the emploees and also the leader if the contract isn't signed by any of the person than it can't sue within the close to future if any worst outcome happened .

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