Research Memorandum - BACKGROUND
To complete this assignment, you should apply the principles presented in your textbook.
Your hypothetical supervisor for this project is a law partner in a small law firm representing a new client. For your project, you'll first complete some basic research from suggested websites.
Then, you'll prepare a memorandum to your supervisor, describing which form of business organization you feel would be best for your client. You'll also make some suggestions about what the client's independent contractor agreement needs to contain to be legally enforceable. Your client has also raised some potential ethical concerns which will also need to be considered.
PROCEDURE
You're going to prepare a written memorandum to your supervisor to assist him in preparing a presentation for a new business client. In addition to the information provided below, you'll refer to the general information on business organizations and employer-independent contractor relationships in your textbook as well as your understanding of business ethics. You'll also need to do some Internet research. Then, you'll write your memorandum.
GOAL
Your goal for this project is to complete a well-written memorandum that addresses two legal issues:
• The appropriate form of business organization for your client's business
• Requirements for your client's independent-contractor agreement, to make sure it's legally enforceable and isn't viewed as an employment agreement Remember not to use too much legalese in your memo.
You're writing it to your supervisor, and you would expect him or her to have some knowledge of the subject matter.
However, you must completely explain what the law is for each type of business organization you're considering and the reasons you've selected one type of business organization as best
For your client. The same complete explanation is required when discussing the issue of your client's independent contractor agreement.
WRITING GUIDELINES
Prepare your answers in well-organized paragraphs.
1. Type your submission, double-spaced, in a standard print font, size 12. Use a standard document format with one inch margins.
Your paper should be written in Microsoft Word or a Word compatible program.
2. Include the following information at the top of your submission: Name and address, student number, course title and number, and project number.
3. Read the assignment carefully and address the issues suggested.
4. Be specific. Limit your submission to the topics raised.
5. Include a reference page that lists Web sites, journals, or any other references used in preparing the submission.
Remember, if you use someone's words or ideas, you must cite them directly in your memo.
6. Proofread your work carefully. Check for correct spelling, grammar, punctuation, and capitalization.
For this project, please use the following format for your legal memorandum: The Project
MEMORANDUM
To: Student
From: Supervisor
Re: New Client, Career Institute of America, Inc. (CIA)
Date: December 6, 20-
FACTS: We have just met a new client, the CEO of Career Institute of America, Inc. (CIA). Although the business was formed a year ago as a nonprofit corporation, they aren't sure they are happy being a nonprofit.
CIA is a classroom and online education organization that specializes in training students in the United States auto industry, one of this country's largest industries. Their founder, who also serves as the CEO of CIA, would like to retain most of the ownership and control of the company, because it's really his enterprise. He also has some concerns about the independent contractor agreement their instructors must sign when they agree to work for the company. He wants to be sure they aren't construed as employees of the company and are viewed as true independent contractors. He had been told that it's typical in the industry that instructors such as his are viewed by the IRS as employees. He has indicated that he doesn't care what he has to do but he wants them to be independent contractors, and if later on they are deemed to be employees, he'll just file for bankruptcy.
Note that most of the company's income is from online training courses. You should also know that they received a U.S. Department of Labor retraining grant for the instruction they are currently providing and that this type of grant is awarded only to nonprofit educational organizations. Even though CIA was able to obtain this grant as a nonprofit institution, they realize it was a one-time grant. They must make their income from tuition for online courses and in the two small classrooms in which they teach traditional courses. This is why they aren't necessarily opposed to changing their form of business from a nonprofit organization to a for-profit business. You should further know that the employment contract they provide to their instructors looks as if it was designed by an amateur and may not comply with the legal requirements for a valid independent-contractor agreement.
RESEARCH ASSIGNMENT: Research two areas of law and prepare a memorandum addressing each area, so the client can be properly advised on how to proceed. First, determine the limitations of a nonprofit corporation in the state of Delaware, the state in which CIA was formed and is doing business. You should also review the law for nonprofit and For profit corporations, as well as limited liability companies, to determine the best form of business for the client. Consult the listing of Delaware statutes on the Delaware state website at https://www.corp.delaware.gov/DElaw.shtml to assist you in your research.