RESEARCH MEMORANDUM
BACKGROUND
To complete this project, you'll prepare a written memorandum. The memo is addressed
to your supervisor, a law partner in a small law firm. In the memorandum, you'll describe
which form of business organization you feel would be best for a new client.
PROCEDURE
To complete this project, you'll first do some research. Then, refer to your textbook
for review; you'll apply the principles of business organizations and employer-independent
contractor relationships. Use the information provided below to prepare
your memorandum.
GOAL
Your goal for this project is to complete a well-written memorandum to your supervisor
which addresses two legal issues:
1. The appropriate form of business organization for your client
2. What's required to make sure your client's independent contractor agreement is
viewed as a legally enforceable independent contractor agreement and not as an
employment agreement.
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. The same
complete explanation is required when discussing the issue of your client's independent
contractor agreement .
THE PROJECT
Memorandum
You'll respond to the memorandum received from your supervisor.
To: Student
From: Supervisor
Re: New Client, Career Institute of America, Inc. (CIA)
Date: December 6, 20—
Facts
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 instructors
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 organizations.
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 Assignment
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 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 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 organization
for CIA at this time.
2. 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 general
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 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:
n 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.
n First locate the law for each of the two issues.
n Next, analyze the information you found and apply it to the needs of the client.
n Both your research and your analysis should then be summarized and
included in your memo.
WRITING GUIDELINES
Prepare your answers in well-organized paragraphs, and use these writing guidelines:
1. Type 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
cursive fonts.
2. Include the following information at the top of your submission: Name and address,
student number, course title and number, and project number.
3. Read the assignment carefully, and address the issues suggested.
4. Be specific. Limit your submission to the topics raised.
5. 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.
6. Proofread your work carefully. Check for correct spelling, grammar, punctuation,
and capitalization.
For this project, please use the following format for your legal memorandum:
To:
From:
Re:
Date:
Summary of Applicable Facts:
Issues:
Law:
Analysis:
