In this scenario, students are tasked with forming a business group, deciding on the type of business to run, outlining its operations, identifying the necessary equipment, defining the customer base, listing creditors, and exploring methods to repay them if the business becomes insolvent. They are also asked to research where to file for bankruptcy.
1. **Choose a Business**: Select a business type, such as a restaurant, clothing store, or tech company.
2. **Business Details**: Describe what the business does, like serving food, selling clothes, or developing software. Specify the equipment needed, like kitchen appliances, sewing machines, or computers. Identify the target customers, such as families, fashion enthusiasts, or tech startups.
3. **Creditors List**: List the creditors the business must repay if it faces insolvency:
- Banks for lines of credit
- Mortgage company for real estate
- Trade creditors for equipment, supplies, inventory
- Employees for salaries
- Shareholders or partners for investments
4. **Repayment Methods**: If the business becomes insolvent, consider these methods to repay creditors:
- Chapter 7 bankruptcy for liquidation
- Chapter 11 bankruptcy for reorganization
- Out-of-Court workout for informal agreements
- Assignment for Benefit of Creditors for asset distribution
5. **Bankruptcy Filing**: Research where to file for bankruptcy:
- Bankruptcy petition typically filed in federal district court
- Final accounting filing location may vary by city, county, and state
By following these steps, students can understand the business setup process, creditor repayment options, and the legal aspects of bankruptcy filing.
