New Client, Career Institute of America, Inc. (CIA) (Other (Not Listed) Sample)
Your goal for this project is to complete a well-written memorandum to your supervisor
which addresses two legal issues:
The appropriate form of business organization for your client
s required to make sure your client's independent contractor agreement is
viewed as a legally enforceable independent contractor agreement and not as an
Remember not to use too much legalese in your memo. You're writing to your supervisor,
who has 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.
complete explanation is required when discussing the issue of your client'
You'll respond to the memorandum received from your supervisor.
New Client, Career Institute of America, Inc. (CIA)
December 6, 20—
We've just met a new client, the founder and 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 U.S. auto industry, one of this country's largest industries. The client 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, which instruc
tors must sign when they agree to work for the company. He wants to be sure they're
viewed as true independent contractors, and not construed as employees of the company.
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, a type of grant awarded only to nonprofit educational organi
zations. Since this was a one-time grant, they must now make their income from tuition
for online courses and in the two small classrooms where 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 the two areas of law described below and prepare a memorandum addressing each area so the client can be properly advised on 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 compa
nies, to determine the best form of business for the client.
Consult the listing of Delaware statutes on the Delaware state website at
to assist you in your research.
For more general information concerning nonprofit corporations, for-profit corpora
tions, and limited liability companies, the following websites 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 organiza
tion for CIA at this time.
The second issue concerns the contract signed by CIA
instructors, who teach the
programs and grade the students' papers.
Research employment and independent contractor agreements using the websites
listed above or on search engines such as Google or Bing. Since the agreements
will be signed by client's instructors located in other states, we want to use the gen
eral law dealing with such agreements rather than state-specific. Be sure to identify
each of the key elements necessary for the agreement to be viewed as an inde
pendent contractor agreement and not an employment agreement, as well as any
other suggestions you might have for the client in connection with their instructor
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 contractor and not an employee.
First locate the law for each of the two issues.
Next, analyze the information you found and apply it to the nee
ds of the client.
Both your research and your analysis should then be summarized and
included in your memo
Prepare your answers in well-organized paragraphs, and use these writing guidelines:
ype your submission double-spaced, in a standard print font of size 12. Use
a standard document format with one-inch margins. Don't use any fancy or
Include the following information at the top of your submission: Name and address,
student number, course title and number, and project number.
Read the assignment carefully
, and address the issues suggested.
Be specific. Limit your submission to the topics raised.
Include a reference page that lists websites, journals, or any other references used
in preparing the submission. Remember, if you use someone's words or ideas, you
must cite them directly in your memo.
Proofread your work carefully
. Check for correct spelling, grammar, punctuation,
For this project, please use the following format for your legal memorandum:
Summary of Applicable Facts:
Re: New Client, Career Institute of America, Inc. (CIA)
Date: December 31st, 2017
Summary of Applicable Facts: the client is not sure whether he is happy with his education organization, namely Career Institute of America, being a non-profit organization. The organization received a one-time grant and should now make its money from tuition, and thus it may be prepared to change its form of business from a non-profit to a for-profit business. The client wants to retain most of the control and ownership of the firm. Also, the client wants to ensure that his instructors are true independent contractors and not viewed as company employees.
Issues: The first issue is to determine the most suitable form of business organization to meet the needs of the client. The second issue is to determine the requirements for an instructor to be considered as an independent contractor instead of being deemed an employee.
Law: according to Sections 102 and 391 (j) of the General Corporation Law of the State of Delaware, a not for profit organization is deemed an exempt corporation. It is exempted from taxation under Section 501(c) of the US Internal Revenue Code, and no part of the company’s net incomes benefits any member or individual. Such a company is owned by its members, does not have stockholders, and is non-profit hence individuals cannot receive profits from the organization (Department of State). Also, if the company closes, its assets have to be given to another not-for-profit organization. For-profit corporations in Delaware are those business organizations whose aim is to earn profits through their operations. These companies are concerned with their own interests (Department of State). As per Section 18-201 of the Limited Liability Company Act of the State of Delaware, l
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