For your project, you’ll first complete some basic research
from suggested websites. Then you’ll prepare a memorandum
to your supervisor describing which form of business organization
you feel would be best for your client. You’ll also make
some suggestions about what the client’s independent contractor
agreement needs to contain to be legally enforceable. Your
supervisor for this project is the law partner in a small law
firm representing a new client.
You’re going to prepare a written memorandum to your
supervisor to assist him in preparing a presentation for a
new business client. In addition to the information provided
below, refer to the general information on business organizations
and employer-independent contractor relationships in
your textbook. You’ll also need to do some Internet research.
Then write your memorandum.
Your goal for this project is to complete a well-written memorandum
to your supervisor to address two legal issues:
■ The appropriate form of business organization for your
■ Requirements for your client’s independent contractor
agreement, to make sure it’s a legally enforceable independent
contractor agreement and not viewed as an
Remember not to use too much legalese in your memo.
You’re writing it to your supervisor, and you would expect
him or her to have some knowledge of the subject matter.
However, you must completely explain what the law is for
each type of business organization you’re considering and the
reasons you’ve selected one type of business organization as
best for your client. The same complete explanation is required
when discussing the issue of your client’s independent
For this project, please use the following format for your legal
Summary of Applicable Facts:
Re: New Client, Career Institute of America, Inc. (CIA)
Date: December 6, 20—
FACTS: We have just met a new client, the CEO of Career
Institute of America, Inc. (CIA). Although the business was
formed a year ago as a nonprofit corporation, they’re not
sure they’re happy being a nonprofit.
CIA is a classroom and online education organization that
specializes in training students in the United States auto
industry, one of this country’s largest industries. Their
founder, who also serves as the CEO of CIA, would like to
retain most of the ownership and control of the company,
since it is really his enterprise. He also has some concerns
about the independent contractor agreement their instructors
must sign when they agree to work for the company. He
wants to be sure they’re not construed as employees of the
company and are viewed as true independent contractors.
Note that most of the company’s income is from online training
courses. You should also know that they received a U.S.
Department of Labor retraining grant for the instruction they’re
currently providing and that this type of grant is awarded only
to nonprofit educational organizations. Even though CIA was
able to obtain this grant as a nonprofit institution, they realize
it was a one-time grant. They must make their income from
tuition for online courses and in the two small classrooms in
which they teach traditional courses. This is why they’re not
necessarily opposed to changing their form of business from a
nonprofit organization to a for-profit business.
You should further know that the employment contract they
provide to their instructors looks as if it was designed by an
amateur and may not comply with the legal requirements
for a valid independent contractor agreement.
RESEARCH ASSIGNMENT: Research two areas of law and
prepare a memorandum addressing each area, so the client
can be properly advised how to proceed. First, determine the
limitations of a nonprofit corporation in the state of
Delaware, the state in which CIA was formed and is doing
business. You should also review the law for nonprofit and
for-profit corporations, as well as limited liability companies,
to determine the best form of business for the client.
Consult the listing of Delaware statutes on the Delaware state
website at http://www.corp.delaware.gov/DElaw.shtml to
assist you in your research.
For more general information concerning nonprofit corporations,
for-profit corporations, and limited liability companies,
the following are additional websites that can assist you:
Combine this information with what you know about business
organizations and what the client wants, so you can
recommend the best form of business organization for CIA
at this time.
The second issue concerns the contract that CIA has its instructors
sign. (The instructors teach the programs and grade the
student’s papers.) You’ll need to review the law dealing with
employment and independent contractor agreements to
determine what the contract needs to include to be properly
viewed as an independent contractor agreement and not
an employment agreement.
Research employment and independent contractor agreements
online. A general search using these terms in the websites
listed above or even on Google, Bing, or any other search
engine should assist you in finding the law dealing with these
types of agreements. Since the agreements will be signed by
our client’s instructors located in each state we want to use
the general law dealing with such agreements. In your memorandum,
please be sure to identify each of the key elements
necessary for the agreement to be viewed as an independent
contractor agreement and not an employment agreement, as
well as any other suggestions you might have for the client
in connection with their instructor contracts.
Here are some helpful hints:
Remember that the project requires that you use the memo
format provided and that you research both issues requested:
the most appropriate form of business organization to meet
the client’s needs and the requirements for an agent to be
deemed an independent contrator and not an employee. You
should first locate the law for each of the two issues. Then,
you need to analyze the information you found and apply it
to the needs of the client. Both your research and your
analysis should then be summarized and included in your