A. Norman is the chief executive officer of Acme Widget Corporation. Normans responsibilities include decisions on product development, marketing, and other significant business directions. Norman is subject to the approval and oversight of Acme Widget Corporations board of directors. Mickey is a Acme Widget manager whose duties include the firms day-to-day hiring, firing, purchasing, and selling. Echo is an Acme Widget salesperson, whose daily activities are controlled by Mickey. Eugenie writes sales manuals and promotional materials for Acme Widget Corporations products according to Normans instructions and subject to Acme Widget Corporations control, but has no dealings with the companys customers or suppliers. Betty writes copy on a contract-per-project basis and is not otherwise subject to Acme Widget Corporations control.

Who is a principal, why and what does this mean? Who is an agent, why and what does this mean? Who is an employee, why and what does this mean? Who is an independent contractor, why and what does this mean?

B. Sarah, the owner of Sushi Sushi, is a sole proprietor. What are the chief characteristics, advantages, and disadvantages of this form of business organization? Sarah wants to obtain additional capital to expand Sushi Sushi, but she does not want to lose control of the firm.

As a sole proprietor, what is her best option to attain these goals?

C. Sarah subsequently decides to take in a partner. Sarah and Bill form a partnershipSushi Sushi Partners. Bills capital contribution is $10,000 in cash, and Sarahs is the existing business which is valued at $15,000. The partnership agreement provides that profits are to be shared, with 40 percent for Bill and 60 percent for Sarah. Later, Bill makes a $10,000 loan to the partnership when it needs more working capital. After a few successful years Sarah decides to leave the partnership to become a franchisee in another type of restaurant business.

When the partnership is amicably dissolved, its assets are $50,000, and its debts are $8,000. How should the assets be distributed?

D. The franchisor which Sarah decides to take a franchise from is called Chippy Cheddar Chips, Inc.. Chippy Cheddar Chips imposes on its franchisees standards of operation and personnel training methods.

What is the potential pitfall to Chippy Cheddar Chips, Inc if it exercises too much control over its franchisees?