Law of Business Organization Corporate Financial Strategy

Question: Discuss about the Law of Business Organizationfor Corporate Financial Strategy. Answer: In the given case, Alfred and Beatrice have been operating a bookshop together and thus sharing profits equally. On the thought of the expansion, their friend had offered for finance and the agreement was done against a return for $5000 annually i.e. payable from the sales less outgoings. Coco was tensed about the loss of the money and on this the partners Alfred and Beatrice has agreed to take the consultations for major decisions and also offer the investigation process of the company at anytime. Hence, Coco is undertaking a major threat and risk. The right to inspect the books at any time doesnot has a great significance for Coco as the records and statements on accounting can be easily falsified by the partners. The manipulation of the financial records and statements are easy on behalf on any of the students or practitioners (Daniel-Kagbare 2014). Therefore, at this point of time Alfred, Beatrice and Coco does not have any legal connections, as it is an oral agreement. If Coco would be charging an interest and would be willing to put up $50,000 of her own funds for getting the pay back at an amount of $5,000 per year and interest, he would have been a private investor of the company. If in case $5,000 per annum were to be paid out of profits, it would be the same as the payment of $5000. The payment of $5,000 i.e. amount payable from the sales less the outgoings payable yearly will be considered same as the term sales less the outgoings represents the profits of the business (Bender 2013). References Bender, R., 2013.Corporate financial strategy. Routledge. Daniel-Kagbare, T.E., 2014.A dictionary of economics and commerce. AuthorHouse.