The best business organizational form for the given business startup scenario would be Limited Partnership. Quite significantly, while Adam and Laura are prepared to participate in the daily operations of the business and bear personal liability in the company, Laura’s mother is not ready. Considering that from the scenario it is apparent that Adam and Laura do not want to exclude her from the business, partly because she is prepared to contribute startup costs and partly because of the blood relationship she enjoys with Laura, it is advisable that they adopt a business organizational form that fits such a situation.
According to Matheson (2002) description of a limited partnership, the given scenario fits this business organizational form. Matheson describes limited partnership as a business organizational form that is comprised of one or more general partners and one or more limited partners. The general partners in this form of business occupy the same status as in general partnership, where they are jointly and collectively for the debts of the business.
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Limited partners, only the other hand, are considered different from the business and are normally liable only to the share contributed to the startup costs. They do not participate in the daily operations or management of the business unless they are prepared to let go their limited liability status. Participating in the control and management of the business means that they lose their limited liability and become personally liable to the debts of the partnership, which ultimately prevents them from possessing ultimate decision-making responsibility. In this case, therefore, Dazzling Doggies Day Spa can assume this business organizational form, where Adam and Laura will be general partners and Laura’s mother a limited partner.
Another aspect that makes limited partnership the best fit for Dazzling Doggies Day Spa is limited partnerships apply mostly to family contexts. From the scenario, it is apparent that Dazzling Doggies Day Spa assumes some family context features. Laura, a general partner, is Beth’s daughter.
Adams acts of using Dazzling Doggies Day Spa's checking account to pay all his personal bills without the awareness of Laura and Beth is purely unethical. Of particular significance, it is a statutory law that all partners, regardless of their partnership status should separate the activities of the Limited Partnership from their personal affairs. Secondly, it is a general Code of Ethics and Business Conduct that all partners perform their work with honesty, truthfulness and integrity (Lankoski, Smith & Van Wassenhove, 2016). Using the business funds to pay personal bills, Adam has breached this code of ethics, and it is clear-cut lack of honesty, truthiness and integrity. Similarly, Ethically, Adam is under moral obligation to ensure the business funds are used for legitimate business purposes only.
Business startups may assume a diversity of organizational forms depending on their structures, number of shareholders involved, specific nature of individual shareholder, and legal parameters in a given state. Based on the feature of Dazzling Doggies Day Spa's, the most appropriate organizational form would be Limited Partnership. This is subsequent to the nature of partners involved. However, despite the organizational form adopted, there are various universal ethical issues that may arise if a shareholder deviates from the standard Code of Ethics and Business Conduct.
References
Lankoski, L., Smith, N. C., & Van Wassenhove, L. (2016). Stakeholder Judgments of Value. Business Ethics Quarterly, 26 (2), 227-256. doi:10.1017/beq.2016.28
Matheson, J. H. (2002). Choice of Organizational Form for the Start-Up Business, 1 Minn. J. Bus. Law & Entrep. 7.
