Legal ethical and social environment
Answer 1
Brandon is an employee of Shedmax. There are several ways used to determine whether a person is an independent contractor or a company employee. First, we can look at the company’s level of control over the worker, such as reporting and leaving time. In this case, we are told that Brandon must report to work at 8 am and leave at 5 pm. This indicates that Shedmax controls how Brandon does his job. Secondly, we are told that Brandon uses the tools provided by Shedmax. In most cases, a company provides work tools to its employees, whereas independent contractors are expected to use their tools. Company employees have their insurance needs taken care of by the company. However, the information on insurance, pensions, vacation, and taxation is not mentioned. Employment and labor laws apply only to company employees and not independent contractors (Lawlor & Willey, 2017). From the limited information provided, we can conclude that Brando is an employee of Shedmax.
Answer 2
We are presented with a case where Paul enters into a contract with a local farmer on behalf of Hemp Company before incorporation. This presents an example of a pre-incorporation contract. In a pre-incorporation contract, the name of the corporation indicated in the contract had not been formed. For this reason, the contract is not bound on the corporation (Jennings, 2018). However, there are cases where the corporation may decide to adopt the contract and carry the rights and liabilities of the contract. In this case, we are informed that the board fails to honor the contract made between Paul and the local farmer. Paul is liable to the farmer.
Answer 3
There are several ways individuals can raise money to start their businesses, such as bank loans, savings, borrowing from friends, and crowdfunding. In this case, Tina wants to raise capital through the internet, raising the concept of crowdfunding. Crowdfunding has become a popular way of raising money, especially due to the ease of acquiring funds. Many artists have been able to foster awareness and raise a considerable amount of capital through crowdfunding to start their ventures. SEC exemptions have enabled individuals to raise capital through crowdfunding without their companies “going public.”
There are four main types of crowdfunding available for Tina to choose: donation-based, equity-based, debt, and rewards-based crowdfunding. Out of these, donation and rewards-based crowdfunding are not regulated by the securities law. On the other hand, debt and equity-based crowdfunding are regulated by the SEC. SEC exemptions under Regulation D enables people to raise money through crowdfunding without going through the SEC registration process. The SEC exemptions require that one goes through a SEC-registered intermediary and is limited to raising a total of $1.07 Million within 12 months (Burke, 2019). The amount Tina wishes to raise is $85, 000, which falls within the requirements. Tina can, therefore, go for Equity-based or debt crowdfunding.
References
Burke, Q. (2019). Determinants of securities crowdfunding success under SEC regulation crowdfunding. SSRN Electronic Journal. doi:10.2139/ssrn.3425853
Jennings, M. (2018). Business: Its legal, ethical, and global environment (11th Edition)
Lawlor, L. G., & Willey, S. L. (2017). Are your workers’ employees or independent contractors? Three exercises to help students accurately classify workers. Journal of Legal Studies Education, 34(2), 167-205. doi:10.1111/jlse.12060