As the owner of Acme Fireworks you have asked me, you manager, to review and explain some ideas to you. In the following pages I have explained the potential personal liability for injuries to consumers and what must be on our labels for safety. Analyzed the newly formed contracts with the retailers and the employment and expansion that are needed for Acme to go along with the new contracts, and then concluding with the change of the business entity.
As we go forward with the growth of the business, we want to be sure things are done properly and that we will meet or exceed our consumer and customers’ standards at Acme Fireworks.
As you are aware you our company needs to be sure that our consumers are aware of two key things their own liability, and warnings. Our consumers need to be aware that when they use our products that they alone are responsible for any damage done by the firing of the firework is their responsibility and not ours. Insurance companies are saying “you can’t always control who is watching your fireworks display and never know who might file a lawsuit against you for any bodily harm caused by a roge firework. Despite how complicated fireworks liability may sound, making sure you’re covered in the event of injuries or property damage is as simple as finding the right custom fireworks insurance plan that can be designed exactly for your needs (Xinsurance, 2009).”
Our labels as you know must contain the following items for consumers’ safety and per Title 16 of the Code of Federal Regulations. Every fireworks device must have: A label with a signal word, either WARNING or CAUTION; A statement describing the hazard(s) associated with the device, such as A statement describing the hazard(s) associated with the device, such as “SHOOTS FLAMING BALLS” or “EMITS SHOWERS OR SPARKS”; And information describing the actions to be followed or avoided in order to store, handle and use the device safely (Consumer Products Safety Commission, 2001). The company will need to take steps to ensure that the customer is protected and the integrity of the company is not compromised.
Accepting personal liability for the letting of fireworks requires that the customer has a working knowledge of the operation of the pyrotechnics. There is a great level of responsibility accepted by our company for selling fireworks and to the consumer letting them off. Consumer accepts full responsibility for any damages in the use of products purchased from Acme Fireworks.
From what you have told me already, Event Palace and Party Store have submitted a request for large quantity orders on an ongoing, regular, basis. You have responded that Acme Fireworks agrees that we have the ability to fulfill the large orders requested, furthermore, both retailers and Acme Fireworks have agreed on a cost of $500.00 per case. As your manager, this constitutes an implied contract with these retailers and it is appropriate to act upon it quickly and get a simple contract drawn up for each of the retailer, signed by the proper people. First off I will give you some of the definitions of what should be in the contract, i.e. offer, terms, clauses, and acceptance, once complete, I will have an example of what I think the contract should contain.
An offer must, “contain a clear promise to enter into a contract, must have reasonably certain terms, and must be communicated by the promisor (the person making the promise ) to the promise (the person to whom the promise is made)” (Rogers, 2012). Terms are what we and the retailers want from each other and what we expect in return; clauses are ways out of the contract if something unforeseen happens to either of the retailers or Acme. Finally, acceptance is where the responsible parties’ purchasing personnel, would sign the contract.
Acme Fireworks will provide Event Palace with a minimum of 500 cases per month at a cost of $500 per case for the next two years, with the understanding that Event palace must place an order no later than 3 weeks prior to their next shipment. If Event Palace needs a quick shipment or a special order of $300 or more Acme would need to have that item in stock or they would need to add it to the next order, or pay additional prices for rush delivery. If an unforeseen and/or uncontrollable event happens to either party, they may have the option to back out of the contract, for a negotiated period of time, for repairs or termination of the contract, if necessary. Conditions such as but not limited, but not limited to, weather conditions, store, warehouse, or personal property damage. The contract will be kept in force, until canceled or terminated by agreed upon terms by all parties.
Once we get the contract back from the retailers we need to sit down with Nancy, our Human Resources, and get started with the hiring. For hiring the new employees that we will need for the addition work, the steps of advertising for the positions, scheduling interviews, and meeting to choose the correct candidates must be taken. Let us start off by writing the job descriptions down so we have clear definitions of what each job will entail. Then we can go to placing a couple of online ads with our local unemployment and the local online job agencies. Then contact the three local Employment Agencies and have them do some of the pre screening for us. With increasing our employee numbers above 15 we will have to ensure that each of our employees will not have any type of discrimination being hired. This will keep us in compliance with the 1964 Civil Rights Act.
Once we have the hiring going we will need to watch our scheduling to ensure that we follow the proper Fair Labor Standards Act of 1938 on the regulations, minimum wage hours worked, overtime, employee breaks and we also follow the Occupational Safety and Health Act of 1970 for the continued health and safety of the business (Rogers, 2012).
We want to ensure that employees, both current and new have the understanding of what we expect of them as well as their rights. To do that we need to gather up important information that each employee should know at all times, including the US regulation on handling and storing the explosive powers and form an employee handbook. In the employee handbook we need to include: Non-Disclosure and Conflict of Interest Statements, Compensation, Work Scheduling, Standard of Conduct, General Employment Information (Labor Laws, Minimum Wedge, and Termination Policy), Safety and Security, Media Relations, Employee Benefits and Leave Policies (Small Business Administration 2014). We can have this book on the production floor, available to take home and available to read on one in the break room computers.
With the above changes into place I would like to make one more suggestion, as the Manager of the Acme Fireworks with all the new contracts and the new employees I would like to recommend that we move to a small warehouse located down by the docks in the marina area that has not been in use for a couple of years. The real-estate price is not high for a two year lease and then we could reevaluate where our business has grown; we can still keep the Payroll, and Human Resources here in the garage. I just think this will help the business.
My suggestion as your manager would be to go Limited Liability Company (LLC) and expand to a production warehouse and a sales office. Our current is the entity of a Sole Proprietor, which is good because you and your business are one in the same. The taxes are easy your file one form each year that contain your family and your business and then you are done. You have complete control of what is said and done within the business; no one else has the right to seek for your business. The disadvantage of the sole ownership is that if someone got hurt in the business and sued you they are also suing your family as well. You cannot sell stock in your business so it is hard to raise money and most investors will not invest, and banks are very hesitant to lend money. I would go to a Single Owner Limited Liability Company.
The principal advantage of an LLC is that it is structured like a partnership but with limited liability protection for the owner similar to a corporation. Because an LLC is considered a separate entity from its owner, the owner cannot be held personally liable for its debts and obligations of the LLC, absent any fraud. With this choice you would still be the owner, but you would have limited liability, and your families saving and life would not be interrupted if something happened to the business. The taxes in an LLC “are not taxed as a separate business entity. Instead, all profits and losses are “passed through” the business for each member of the LLC. LLC members report profits and losses on their personal federal tax returns, just like the owners of a partnership would (Small Business Administration 2014)”, or yourself if you choose not to have members. Members can be anyone of your choosing that you would want to share the profits and ownership responsibilities.
As this paper come to an end, I have covered each of the aspects that you the owner of Acme Fireworks as requested I cover. I have covered a lot of material in a short amount of time for you and all very helpful for our growing business. Please use the information wisely and understanding that I am trying to help our business grow in the right way.
As a growing company, we need to ensure that our consumers know their rights and we need to ensure that our products have the proper labeling to follow the US Federal Regulations Title 16. With the oncoming of the new contracts and employees the growth of the company I recommend that we as a company go to a Sole Proprietor LLC. This you can protect your business and your family as we grow your business. As always, please feel free to come and talk to me about anything.
Consumer Products Safety Commission (2001) Fireworks Business Guidance Retrieved on August 24, 2014 from https://www.cpsc.gov/en/Business–Manufacturing/Business-Education/Business-Guidance/Fireworks/ Rogers, S. (2012). Essentials of Business Law. San Diego, CA: Bridgepoint Education, Inc. Small Business Administration (2014) Employee Handbook Retrieved on August 24, 2014 from http://www.sba.gov/content/employee-handbooks Small Business Administration (2014) Limited Liability Company Retrieved on August 24, 2014 from http://www.sba.gov/content/limited-liability-company-llc Small Business Administration (2014) Sole Proprietorship Retrieved on August 24, 2014 http://www.sba.gov/content/sole-proprietorship-0 Xinsurane 2009, Event Home