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Columbia Graduate School of Arts and Sciences ​okay everybody well hello we're at a point here where we're moving on to session two in business organization says we have up here on the board no forget I do have a private email up here robbed a wolf at me comma you can do in addition to the information you find in the syllabus will talk about a session 2 which is kind of a moving forward a little bit but we also want to review a few comments and statements that we made in session once remember one of the first things we talked about in session one was the issue of the sole proprietorship and remember that sole proprietorships it's run by one person and so basically the government still recognizes that you know there's a lot of these small businesses out there that are run by one guy and we noticed that when we were looking at those statistics that that's a huge number of relation to everything else it's like 80 10 you know and then all the rest of the different relationships are in that other ten percent so ten percent giant corporations eighty percent single owner small proprietorship so one thing to understand is there's kind of a sense of need to guard the right to do that in this country here again it's what sets us apart from a lot of different people so the idea that a sole proprietor has to file a lot of paperwork it's kind of not seen as a good thing in this country and as we've had an intrusion of things like workers compensation social security now health care and Taxation and you know having to withhold taxes for people and stuff a lot of these sole proprietors are being burdened down by the need to keep a lot of Records a lot of written paper and so forth so this is very time consuming cuts into the ability to achieve what your goal is make your widget or sell your widget or whatever you're trying to do and so that's why it's not very well favored in our society but one thing we do know in the law is that sole proprietors do not have to file a fictitious business name statement with so the Secretary of State in other words a lot of this they can run on the back of a matchbox if they want and so there's not going to be a lot of state intrusions closer that you get to the individual the more that people are responsive to the needs of the individuals so local government more so than state government state government more so than federal government so there's a lot of federal intrusion into our lives nowadays we never had back I let's say before the Civil War or even in the 20th century in relation to the 21st century or the 19th century in relation to the 20th century so as time goes on life becomes more complex there are more requirements and so many of these require a written response but it is false that the sole proprietor would have to file a fictitious business name statement with the state also sole proprietorships can only be formed with permission of the state is also false other words God can go out start selling watermelons out of the back of his truck and nobody can really stop them from doing that some of your cities are passing rules and regulations that are putting a harsh penalties on merchants it's want to go and sell like door-to-door but quite frankly there's also litigation out there Fourteenth Amendment litigation that goes into you know the right of people free assembly that you know you can solicit other people without any kind of license so let's say for let's say for example your Bible salesman and you want to go like house to house and sell Bibles in in a small town in Indiana or basically anywhere wonder what the law is on that well why don't we have you guys work on that question and you can submit an extra credit assignment on you know what is the law on basically door-to-door salesmen do they have to have a license to sell door-to-door tell me what you find out on if you find a case on it brief it if you just find a treatise or something in LexisNexis let me know like angier or ALR or anything like that that you can find even a law review article you know what are the rights of people to sell you know like the Fuller Brush man used to be when I was kid they'd come knocking on the door and want to sell my mother a new hair brush and then maybe some cleaning supplies to you know like brush off all the dust around the house and things like that now today a lot of cities are trying to claim that they can require a license for people to go door to door but there's other people that say that's an infringement on the right freedom of assembly under the First Amendment through the 14th amendment due process equal protection in other words they have the right to go and solicit people would you like to buy a Bible for example so you get into that religion these type things then you get into the solicitation and stuff and you know people don't like to be bothered especially like just sitting down to dinner somebody comes a-knockin you know a modern example is these phone calls that you get you know could you donate to march of dimes you know right at dinnertime you know and there are rules against that the do not call lists that are coming out but the question is is the solicitation at home by a door-to-door salesman is that still legal or not so try to investigate that and let me know well getting back to some of this presentation that we've been making then a lot of people say that there is a requirement in many states and agree with this that agreements must be in writing to be enforceable and in fact there is a thing called a statue of know what's called statute of fraud okay I'm not lost it there
and if its sales over five hundred dollars or anything involving real estate is required to be in writing so you know you're buying a car has been writing you want to sell your house ask me in writing so you have to have a written agreement of sale conditions and then of course a written deed in order for this to be binding so these are the kind of things that we look at well there is also another concept called the equal dignities rule equal dignities rule and what that relates to is the principal basically authority to engage in a transaction so in other words if you have a real estate agent then there has to be some kind of a pair authority of that person to sell that property for you whether it's a car whatever it is there has to be an attached statement that goes with it that you know this is my agents authority my agent this is my agent I've given him authority to sell these 40 acres here says basically paperwork that says that i did given that right sometimes we use what we call a power of attorney which can be used for a number of different things where you give somebody authority through a power of eternity a power of attorney okay and a lot of times people don't even know how to use the signature process in a power of attorney and so that's one thing that is statutory that Barisan looking into Indiana has a separate statute you actually can refer to the power of attorney as attorney-in-fact and so basically you know this is a consideration hear about these written agreements again well when a manager of a retail shop asks an assistant order new merchandise the assistant acting is acting so in other words when a manager says to an agent in the unemployment say of this little shop let's say it's a sole proprietorship and he says you know clerk call up and order more merchandise and so this would be a sub-agency sub-agency the actual agent is the owner manager agent manager so whoever's in charge is the actual agent of the company but the employee of the agent would be what we call a sub-agent ok now another issue is what is the fiduciary when we say fiduciary duty what's the fiduciary duty of a real estate agent and so real estate agent this has been a really a problematic area real tours they say they have a strong ethical standard but I often doubted because a lot of times it seems like our real estate agent is trying to play both sides of the street they make more money if they represent both the buyer and the seller of real estate for example had a lot of bad experiences wrote with real estate agents where I felt like they were really unethical even though they try to claim that they are ethical because there's a lack of good faith there's a lack of candor there's a lack of fair dealing so basically what you're looking at is they have to have good faith they have to have candor and they have to engage in fair dealing so this has got to be fair to all parties involved you can't cheat anybody you can't lie to them about some whole the roof is brand new when the loop roof is like 30 years old and leaking you know anything that you know as a real estate agent is you've got to share like you're representing the buyer the buyer needs the best information about you know what is the status of this property is it good as it got problems or somebody's probably need to be fixed or you just want to make a sale and put that three percent in your pocket or whatever that percentage is sometimes it's even hire a manager of a retail shop wars new manage new merchandise although the owner of the store has not expressly instructed the manager to do that the act is considered to be authorized under the principles of implied agency implied age so here again there may not be that document that we talked about earlier where you have to prove your authority so here we have what we call the apparent authority and so it is a form of implied agency there are also numerous formalities that are involved in forming a sole proprietorship what's the answer to that no the answer's no that's not true you can just walk out start selling watermelons off the back your truck if you want to and that's your business and you are a sole proprietor of your business and say you want to get some teenagers involved because you can't sit out there for 12 hours a day so you get some kids out there with a cigar box and they sell your watermelons for you that's okay it's perfectly legal that's a sole proprietorship okay I've seen that a lot like my uncle he started a lawn mowing business late in his life in fact it's kind of funny he retired from being involved as a bulk plant manager he went around delivered heating oil to people's houses for his whole life and it's hard work I mean especially in the dead of winter you're having to hook that hose up and pump in the heating oil well when he got retired he was way up in his 70s well he started a little business go around mowing his friends yards because they couldn't find anybody reliable to mow their lawn and so he hired all of his grandkids and was going around making all the arrangements to line up the lawn mowing and then he dropped the kids off with a mower and have him know the people's lon and then he'd come back and pick him up later so it was his job to kind of manage this he wasn't doing any mowing per se but he was lining up something for his grandkids do in the summer make a little money and I thought that was a really neat idea because I don't think he even cared about making money for himself but he was wanting to try to help and you know all parents had to work so they couldn't get involved and really trying to help these kids find a job and so we what he was doing is mean to me because he had a lot of his friends complain and we can't find anybody to do our mowing and he had one of his granddaughter's out there mowing his lawn one day and he had this bright idea is like oh so basically which cab is a little salt and pride ership where you're just hiring all your grandkids and you're taking them out mo peoples lon and then basically you know you're not doing it for a lot of profit or anything my main leaders trying to help your kids help their kids to make
a little money a little spending money out there okay so under the duty of loyalty a real estate agency may not represent the seller and the buyer at the same time unless he discloses it so he's got a duty of disclosure to the buyer and the seller now what I don't like about that is that he convinces them well you know that will not be a problem you know and I just really I don't buy it all too often I just see too many problems with that real estate agent he's really being self-serving first of all because all he wants is a commission and then in turn he really owes duties to one party or the other more so than the other and so somebody is going to get burned in any kind of a three-way deal like that and so the real estate agent has a duty to disclose that he's representing both the buyer and the seller and I I don't think it's that effective it's it's a matter of loyalty it's a duty of loyalty and I just don't think you can be loyal to both parties it'd be like a lawyer trying to do a divorce for both the man and a woman I've heard about it but it always causes problems it's unethical the lawyers will be suspended for that if they do that so it shouldn't be done that way Realtors ought to be the same way you got to pick a side you can't be on both sides at the same time but yet they've got these relaxed laws and rules I don't think it's fair that they're held to such a low standard sole proprietorship does not need a license to conduct business well this is not necessarily true this is all subject to different kinds of local regulation let's say you want to be a medical doctor and you're a sole proprietorship a license well yes you do you want to be an accountant well yeah should you be a CPA yes how about a lawyer well yeah you got to have a license so there's licensing on a number of different things let's say that you are a veterinarian I mean you can just go on and on more and more becomes more complex plumbers you know they need to be they need to know their stuff so a lot of places they require a license that you actually have met all these required standards okay sole proprietors general retain all business profits and suffer all losses by themselves you know that is a true statement and that's why a lot of times people want to go into partnerships because they are in a situation where they you know don't like taking that much risk it's you know it's kind of a comfortable to have to share the proceeds of some kind of a major sale or something but in the long and short of it over time you want to ride the roller coaster or would you like to smooth things out have smooth sailing so that you can make sure that you're at least going to have something coming in because both sides are sharing and the responsibility to run the business and generate profits so that's the advantage of a partnership over a sole proprietorship okay well basically those are the big things I want to cover for session two in business organizations I hope that you learn something at some use of this if you need to look this over more than once always remember you can look at these multiple times I've even had people download these on to like an mp3 player or iPad or something like that and watch them over and over again I said this in another class I had a lady tell me that you watched one of my lectures 32 times I don't know what that was all about maybe she just like me but regardless you can do this again and again if it takes you a while to grasp some of these different concepts well hope you enjoyed it thanks a lot we'll be back later with something else thank you College of Performing Arts.
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