Introduction
The legal aspect of every business increases its success and profitability. Likewise, the legal structure affects how a business is conducted effectively. The type of legal structure chosen for a business implicates how the taxes are paid and incurred risks. For instance, Stacy’s safety in the blueberry business depends on the type of legal structure she adopts for her business. Given that she is currently operating individually in her business with two employees, she is more likely to face vicarious liability in case of negligence. For this reason, Stacy should implement the Limited liability Company legal structure because it will help her shield her personal belongings if she is sued on negligence grounds.
Kind of liability that Stacy’s business might face
Stacy’s business might face vicarious liability. Considering that she has two employees, she is responsible for their negligence while operating in the business environment. Negligence of her two employees will be imputed to her (Giliker, 2010). For instance, Stacy is responsible for the negligence of her employees while performing at the business scope at all times. The higher authority must always respond to any claims concerning their employees. Stacy has the higher authority in this situation since she is the owner. Besides, the development of this business is important in ensuring Stacy feels safe. However, if any vicarious liability risks occur, Stacy’s business has unlimited liability; thus, she is not safe. Stacy also has unlimited personal exposure to risks since she is the owner. Thus, she is responsible for all the liabilities incurred in the business. Since Stacy owns her business alone, it is a sole proprietorship. Even though the costs of building businesses owned by one person are lower, the owner is always responsible for any potential vicarious liability. When Stacy’s employees depict harmful acts out of negligence, the law holds her strictly liable. Stacy also stands a chance of losing all her personal belongings if she sued on negligence grounds since she is the owner.
Legal structure that Stacy should adopt for her business
Limited Liability Companies is a legal structure between general partnerships, sole proprietorship, and a corporation (Carney, 1998). This type of business structure combines all the limited liability features with tax advantages available for Stacy. Conducting business through LLC will help Stacy shield her assets from any business risks except her menaces. If Stacy faces any lawsuit, only the assets of her blueberry business will be at risk. Except in cases of illegality, the creditors will not reach the personal belongings of Stacy in this type of legal structure. Stacy will also enjoy the tax feature accorded to sole proprietors in this type of structure. Additionally, in case of taxations in this type of legal structure, Stacy and the other LLC members will have to report their profits and losses on individual income tax returns.
The LLC legal structure I have recommended will effectively address Stacy’s potential blueberry business liability. Considering that Stacy might face vicarious liability due to the negligence of her two employees, adopting the LLC legal structure will shield her personal belongings if she is sued on negligence grounds.
Conclusion
Adopting the Limited liability Company legal structure by Stacy will help her shield her personal belongings if she is sued on negligence grounds. Given that she is currently operating individually in her business with two employees, she is more likely to face vicarious liability in case of negligence. Vicarious liability is usually imputed on the employer. In Stacy’s situation, any negligent act by her employers in her business scope will be imputed on her. However, adopting the LLC legal structure will help her evade all the vicarious liability risks in her business.
References
Giliker, P. (2010). Vicarious liability in tort: A comparative perspective (Vol. 69). Cambridge University Press. https://books.google.com/books?hl=en&lr=&id=t45MYYCw2QAC&oi=fnd&pg=PR11&dq=vicarious+liability+tort+in+US&ots=yrSy1ZEaJK&sig=IKbtBok5HZO88uqrpU7ay9wDZpw
Carney, W. J. (1998). Limited liability. Encyclopedia of law and economics. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=505632012Books.Lardbucket.Org, 2022, https://2012books.lardbucket.org/pdfs/the-legal-environment-and-business-law-v1.0-a/s10-introduction-to-tort-law.pdf.
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