Week 6 Discussion Post 19 Document | BUS 307 - Business Law II
Legal and/or Regulatory Issue To go public, a firm must register with the Securities and Exchange Commission (SEC) and file a prospectus. A prospectus is a legally binding document that must be submitted with the Securities and Exchange Commission (SEC) that contains information regarding public investment offerings (Murphy, 2022). The fraud case involving Jane, the daughter-in-law, is one of the three difficulties that comes to mind. Jane's fraud case may eventually cause potential investors to be wary. Both Fred and Sally will have to show what internal controls have been implemented in order to reduce future risks. This, too, will aid in removing any doubts that an investor may have about financial control, as well as assisting with SOX compliance. Second, Tammy has a pending sex discrimination complaint that must be reported because she was not offered the bookkeeping job when she applied, and instead Fred and Sally hired Ted, an experienced accountant. This claim is covered by Title VII of the Civil Rights Act of 1964, which prohibits employers from discriminating on the basis of race or religion (EEOC, n.d.). Tammy must show that she was completely qualified for the bookkeeper position, and Fred and Sally must provide a valid justification for Tammy's dismissal from the employment. Tammy must establish cause for discrimination once they can explain why they didn't offer her the job. Although Fred and Sally may have an easier time proving their case because Tammy has just worked as a delivery driver for the company and has no prior accounting skill set. Ted, on the other hand, is a well-known accountant with a solid educational background, making him a better fit for the bookkeeper role. Third, Fred's presence on a prominent talk show with doctors could raise questions about intellectual property rights if the public misunderstands and believes the doctor is the proprietor of the invention. This is also connected to Bob's online exhibition of Fred's cough syrup formula, which he reverse engineered.
Legal Test:
To be in conformity with government requirements, Fred and Sally must first file a registration statement with the SEC, along with an S-1. This will necessitate a full description of the company's held properties, as well as the disclosure of all financial information and any previous or ongoing legal concerns. They will be in compliance with requirements after this is accomplished. Ted's hiring as an experienced accountant will also demonstrate to the company's investors how the company is attempting to resolve previous financial issues.
Recommendation:
a a a a a a a a a a I would advise the company not to go public at this time because they are still embroiled in a number of legal battles. They can, however, go through the venture capital process while planning to go public in the next few years. In order to become a public company, they will also need to convert to a corporation. This will also be a fantastic time for them to begin the educational process and begin preparing themselves if this is the path they absolutely want to take.
Resources:
EEOC. (n.d.). Title VII of the Civil Rights Act of 1964. U.S. Equal Employment Opportunity Commission. (n.d.). Retrieved April 5, 2022, from https://www.eeoc.gov/statutes/title- vii-civil-rights-act-1964 Kubasek, N., Browne, N. M., Herron, D., Dhooge, L., & Barkacs, L. (2019). Dynamic Business Law (5th ed.). McGraw Hill. Murphy, C. B. (2022, February 8). What is a prospectus? Investopedia. Retrieved April 5, 2022, from https://www.investopedia.com/terms/p/prospectus.asp SEC. (n.d.). Initial public offering (IPO). Initial Public Offering (IPO) | Investor.gov. (n.d.). Retrieved April 5, 2022, from https://www.investor.gov/introduction- investing/investing-basics/glossary/initial-public-offering-ipo