Business Contracts and Companies Case Study Examples


The sole proprietorship is the ideal business for the Owen. This is because the type of business is small, and it has two employees hence this type of a business suit the design and the arrangement/ agreement of the owner and the employees. Furthermore, since the business is new it gives the owner enough time to assess the development of the business and how the workers perform their duties. Thus, the owner has the total control of the performance of the workers and how the business is run. Moreover, the sole proprietorship does not require much paper work to get the license to start the business hence it is a good business design for a new business (Mayer et al., 2012)

Moreover, the owner is not interested in making profits in the first years of the business. The sole proprietorship gives him this opportunity to make this decision on how to use the profits of the business. This would not be possible in another form of business where there is divergent of opinion concerning how to use the profits generated by the business. Thus, the owner has the choice of whether to use all the profits for personal use or reinvest into the business.

Questions 2

The life of the corporation depends on the agreements that are contained in the article of the association. The agreement state clearly what conditions can cause the termination of the contract/agreement between the two parties. Thus, the contract between Doc’s Sports Club and Elite Fitness Corporation hugely depends on if Doc’s meet Elite’s membership sales quota. Hence, this is one of the major causes for the termination of the contract. Therefore, if the Doc’s Sports Club has to meet the quotas set by the Elite Fitness Corporation. Failure, to meet these require would trigger the implementation of the clause. Additional, it will be a breach of the contract on the part of Doc’s Sports Club for failing to meet the contract. Hence, it is justifiable to terminate the contract since the conditions in the agreement were not fulfilled (Mayer et al., 2012).

Question 3

The limited partners cannot compel the court to stop the dissolution of the company. This is because the limited partners have no power in the decision making of the business. Therefore, the court cannot order the international company to continue since the general managers have the sole say on how to manage the business.

The parties who will be given the priority in the distributions are the debtors of the company i.e. Friendly Credit Corporation and Gwen (Mayer et al., 2012). The limited partners will be given the second priority; they will be paid according to the ratios of the shares they have in the company. The last people to be paid would be the general managers. The general managers will share what’s remaining according to the ratio they have in the company. After all the resources have been shared, the company can be dissolved.

Question 4

Starting any limited liability company requires various operational details. Petra, Queenie and Randall have to provide operational details such as voting rights, responsibilities and powers of all the members. On the other hand, they should provide the monetary contribution of each member. Additionally, state how they intend to share the proceeds from the business (Mayer et al., 2012). They should also provide a list of directors, objectives and structure of the company. If they fail to provide the details of the company, as stated by the law of companies, hence they cannot form a company they wish. Thus, they have to agree on another form of a Company suits the business and the details they have.


Mayer, D., Warner, D., Siedel, G., Lieberman, J., & Martina, A. (2012). Advanced Business Law and the Legal Environment. New York: Metro Parent Publishing group.

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