Business Law and Ethics
Let’s say you have a 32 year-old niece, Lisa, who has been very successful as an app developer in a Silicon Valley company. She has millions of dollars squirreled away in bonds, bank accounts and equity investments. Unfortunately, she is unhappy with her job. While it can be exciting to work on technical projects that can have big impacts and generate substantial revenue, she has decided that she is financially secure and would like to engage in creative work bringing her in close contact with people.
Since she was in grade school, Lisa’s great pleasure in life has been cooking. Everyone who has experienced the cuisine she has prepared has praised her for her culinary skills. So in looking for a new career, the obvious question she raises is: “How about setting up a high-end restaurant in northern California that specializes in preparing trendy, super-healthy food?’
PART A Assignment 1. Lisa can afford to fund the venture entirely on her own, or can take out a loan, or can work with two or three partners who have indicated interest in joining her as partners. (She has other options as well, but we’ll limited them to the three described here.) Specifically, in the context of setting up a trendy restaurant, what are the pluses and minuses of each of the three options she is investigating? (2 pages)
2. Identify three potential legal liabilities she faces in launching and running the restaurant. How likely is each to arise? What steps can she take to handle each? No abstract, general comments on liability, please — make sure your answer pertains to her restaurant venture. (2 pages)
3. Several months after launching her restaurant, which is doing well and receiving positive Yelp reviews, a neighbor who lives just a few houses down the street, is taken away in handcuffs by the US postal police. It turns out he was running Internet scams from his house that entailed defrauding senior citizens, a criminal activity covered by the US Postal Service police. Over subsequent months Lisa reads about court actions against him and the penalties he may face tied to his criminal activity. Note: Mail fraud can carry substantial jail time. If the criminal is charged with a RICO felony, things can become much worse. (2 pages)