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You are the manager of Acme Fireworks, a fireworks retailer who sells fireworks, puts on ground display fireworks, and large aerial display fireworks. The company started in the owner’s garage two years ago and now has 15 employees that you manage. The company started as a sole proprietorship, and the owner has never changed the entity. The owner has informed you that the company has received inquiries from several large businesses wondering if the company could create several fireworks displays on a regular basis. The owner told the inquirers that the company could fill such display orders, and a price per display was agreed upon. It was discussed that most of the cost for a fireworks display is for skilled labor, insurance, and the actual service of setting off the fireworks. No other details were discussed. The owner is anticipating that new employees will need to be hired, but he is worried that if the large orders for fireworks displays do not continue, the company will not have the funds to pay the new employees. The owner is now considering changing the business entity, but he does not know what entity to form or how to form it.
The owner has asked you to do the following:
Determine if the contracts with the businesses will be governed by common law or the Uniform Commercial Code (UCC), and explain why.
Analyze whether the owner formed a contract with the businesses, and apply the five essential elements of an enforceable contract.
Explain the potential personal liability to Acme Fireworks if a spectator is injured by a stray firework from a fireworks display.
Discuss the different employment types and relationships relevant to agency law, and analyze the advantages and disadvantages of each type specific to Acme Fireworks.
Explain why Acme Fireworks should not operate as a sole proprietorship. Recommend a new business entity, and provide rationale to support your recommendation.
For each task, be sure to analyze the relevant law, apply the facts to the law, and make a conclusion.
Must be 8 to 10 double-spaced pages in length (not including title and references pages) and formatted according to APA style as outlined in the Ashford Writing Center.
Must include a separate title page with the following:
Title of paper
Course name and number
Must begin with an introductory paragraph that has a succinct thesis statement.
Must address the topic of the paper with critical thought. That is, describe what your response is to the content, either positive or negative, and defend your position. If multiple options, alternatives, and/or positions are present and are being rejected, you must also defend the reasons for rejecting an option.
Must end with a conclusion that reaffirms your thesis.
Must include at least five scholarly sources, two of which must be from the Ashford University Library, in addition to the course text.
Must document all sources in APA style as outlined in the Ashford Writing Center.
Must include a separate references page that is formatted according to APA style as outlined in the Ashford Writing Center.
Below is what I have for my outline currently
Acme is a fireworks retailer which sells fireworks, they put on ground displays and have
large aerial display fireworks. Acme Fireworks is currently a sole proprietorship, which started
their business in a garage. Acme Fireworks is now considering expanding their business because
of the number of inquiries that have been put forth to their company. If their business is
expanding Acme Fireworks has to reevaluate what kind of insurance they will need for dealing
with explosive material as there are many liabilities for customers that could be involved, and
they will have to decide what types of employees they will employ. With the business possibly
expanding I will also have to evaluate whether the company adheres to common law or to the
Uniform Commercial Code (UCC), make the analyzation of a contract being adhered to from the
owner of Acme Fireworks, give explanations of potential personal liabilities for customers
during a firework display, discuss the different employment types that are available to the
company, and recommend what type of business entity Acme Fireworks should become other
than a sole proprietorship since the owner would not be educated in this decision.
As I am the manager of Acme Fireworks I have been asked to evaluate whether the
business will governed under common law or the UCC.
For this specific business it would best be explained under the Uniform Commercial
Code. The UCC is best because it deals with the ability of state to state transactions, and the
ability for the company to sell the goods the company needs to sell. (Weiss, 2016, para 12)
Five Essential Elements
The five essential elements are:
Running Head: OUTLINE
4. Legal Capacity
5. Legality (Rogers, 2012)
If an individual were to get hurt during a firework explosion, it would be covered with
company liability. The company would not be personally liable as long as the company was
staying within the specific safety requirements for fireworks. (Pakroo, 2016, pg 122& 123)
Employment Type and Agency
Acme would have to consider the different types of employees that they are going to
retain because of the different types of business transactions that are occurring in their business.
3. Agency Laws
4. Contracting vs. Employment (Rogers, 2012)
Single Member LLC
Financially speaking it would make more sense for Acme fireworks to be a single member LLC.
They would be a single business entity, and that would be more beneficial for a small company
to evaluate also what they want to do with employees. (Woehlke, 1995, para 10)
Running Head: OUTLINE
Weiss, M. J. (2016). Contract law. Salem Press Encyclopedia,
Pakroo, P. H. (2016). CHAPTER 7: Risk Management. Small Business Start-Up Kit, 121-138.
Peek-Asa, C., Casteel, C., Kaus, J., & Whitten, P. (2006). Employee and customer injury during
violent crimes in retail and service businesses. American Journal Of Public Health, 96(10),
1867-1872 6p. doi:10.2105/AJPH.2005.071365
Woehlke, J. A. (1995). LLCs: The business planner’s dream entity. CPA Journal, 65(6), 16.
Robinson, O. (1993). Employment ins Services: Perspectives on Part-time Employment Growth
in North America. Service Industries Journal, 13(3), 1.
Rogers, S. (2012). Essentials of Business Law [Electronic version]. Retrieved from
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