P r o v i d e the following information about the business you c r e a t e d inW k 1.

• Based on the type of product your business will offer, d i s c u s s potential product liability issues and how your company can avoid these potential risks. If your business only provides a service, pick a product your business will purchase and use it to answer this part.
• E x p l a i n the applicability of the UCC to your transactions and your plans to handle sales contracts and warranties. If your business provides a service, explain why the UCC will not apply.
• What is the difference between FOB Shipment and FOB Destination? Explain the advantages and disadvantages of each. Identify shipping term(s) you plan to use for your business and explain the selection.

W k 1 d i s c u s s i o n was :

Name of business is Swahili foods Ltd. This business offers the main Swahili delicacies such as:

• Shurba
• Chicken Biryani
• Pilau
• Chicken curry
• Sweet Sriracha chicken

This business was selected because it is one if the few restaurants in this region that offers authentic Swahili foods and hospitality.

The business is located in West Seattle, Washington.

The type of business organization is a limited liability company because LLCs limit an owner's personal liability for business debts and lawsuits and offer a lot of flexibility when it comes to ownership, management, and taxation of the business.

The advantages of this type of organization include:

• The company exists as a separate legal entity that protects its members from being personally liable for business obligations.
• Tax advantage: Law treats the income of a Limited Liability Company as the income of its members/owners. This means that the members of a limited liability company can avoid double taxation.
• Simple: they are relatively easy to set up and run
• Under limited liability companies, they are free to divide their business profits in the ratio which they think is appropriate. This ratio, however, should comply with the Internal Revenue Service's rules on partnership income distribution.

Disadvantages

• No perpetual existence: Most of the states in the US require the founders to set a limit for the company's existence. Even in the absence of such a clause, a limited liability company will cease to exist in the event of death or withdrawal of a member from the company.
• Difficult to do business across states: Since limited liability companies are registered with states and not Federal agencies, different states may have different regulations governing such companies.
• Difficult to raise capital as the main sources are equity and debt.

Legal requirements for formation of the LLC in Washington are:

• An LLC operating agreement is not required in Washington, but is highly advisable. This is an internal document that establishes how your LLC will be run.
• A Washington LLC is created by filing a Certificate of Formation with the Secretary of State. The certificate must include the LLC's name, whether the LLC's period of duration is perpetual or limited, the effective date of formation--upon filing of the certificate or a later date, the name, signature, and address of the LLC's registered agent, the LLC's principal office address, and, the signature of executor.
• Every Washington LLC must have an agent for service of process in the state. This is an individual or business entity that agrees to accept legal papers on the LLC's behalf if it is sued.
• If your LLC has more than one member, it must obtain its own IRS Employer Identification Number (EIN), even if it has no employees.
• Washington State requires virtually all businesses to obtain a state business license.
• Every Washington LLC and foreign LLC authorized to do business in the state must file an annual report (also known as an annual renewal) with the Secretary of State.