11/16/2025
WGU D078 TEM2 Task 2: Legal and Ethical Considerations| Passed
on First Attempt |Latest Update with Complete Solution
A. Comparison of Legal Entity Types
A1. Limited Liability Company (LLC)
An LLC is a business entity that protects its owners from personal financial risk while allowing
flexible management. If the farmers market venture were organized as an LLC, taxation would
follow a pass-through model. Profits and losses would be taxed on the owners’ personal tax
returns rather than through a separate business tax. This keeps things simple and prevents double
taxation.
Liability is one of the strongest advantages of an LLC. The farmer and retailer would be
protected from being personally responsible for lawsuits or major debts. This is important for the
farmer because they specifically want to avoid a large personal financial loss if the venture
struggles. The LLC structure separates personal assets from business obligations.
In terms of ownership and control, an LLC offers flexibility. The owners can create a
management structure that fits their preferences. The farmer could retain stronger control even
while working with the retailer. An LLC also limits outside influence, which matches the
farmer’s desire to keep decision making within the partnership instead of involving external
investors.
A2. Corporation
A corporation is a legal entity separate from its owners. If the farmers market were organized as
a corporation, taxation would be more complex. Corporations often face double taxation, which
means the business pays taxes on profits and then owners pay taxes again on dividends. While
there are ways to structure around this, it is still more complicated than an LLC.
Liability in a corporation is limited just like in an LLC. Owners are not personally responsible
for business debts or legal issues. This protects both the farmer and retailer. However, it does not
solve the farmer’s concern about losing control.
Ownership and control in a corporation usually depends on shares and a board of directors. The
retailer suggested a corporation because they want more authority, the ability to expand
ownership, and more influence over decisions. A corporation also makes it easier to bring in
outside investors, which the retailer supports. However, this structure would reduce the farmer’s
decision-making power. Shareholders and a board would influence major business operations,
and outside investors would gain a voice in the direction of the venture.
B. Legal and Ethical Obligations of the Employer
B1. Legal Obligation Under the Fair Labor Standards Act (FLSA)
WGU D078 TEM2 Task 2: Legal and Ethical Considerations| Passed
on First Attempt |Latest Update with Complete Solution
A. Comparison of Legal Entity Types
A1. Limited Liability Company (LLC)
An LLC is a business entity that protects its owners from personal financial risk while allowing
flexible management. If the farmers market venture were organized as an LLC, taxation would
follow a pass-through model. Profits and losses would be taxed on the owners’ personal tax
returns rather than through a separate business tax. This keeps things simple and prevents double
taxation.
Liability is one of the strongest advantages of an LLC. The farmer and retailer would be
protected from being personally responsible for lawsuits or major debts. This is important for the
farmer because they specifically want to avoid a large personal financial loss if the venture
struggles. The LLC structure separates personal assets from business obligations.
In terms of ownership and control, an LLC offers flexibility. The owners can create a
management structure that fits their preferences. The farmer could retain stronger control even
while working with the retailer. An LLC also limits outside influence, which matches the
farmer’s desire to keep decision making within the partnership instead of involving external
investors.
A2. Corporation
A corporation is a legal entity separate from its owners. If the farmers market were organized as
a corporation, taxation would be more complex. Corporations often face double taxation, which
means the business pays taxes on profits and then owners pay taxes again on dividends. While
there are ways to structure around this, it is still more complicated than an LLC.
Liability in a corporation is limited just like in an LLC. Owners are not personally responsible
for business debts or legal issues. This protects both the farmer and retailer. However, it does not
solve the farmer’s concern about losing control.
Ownership and control in a corporation usually depends on shares and a board of directors. The
retailer suggested a corporation because they want more authority, the ability to expand
ownership, and more influence over decisions. A corporation also makes it easier to bring in
outside investors, which the retailer supports. However, this structure would reduce the farmer’s
decision-making power. Shareholders and a board would influence major business operations,
and outside investors would gain a voice in the direction of the venture.
B. Legal and Ethical Obligations of the Employer
B1. Legal Obligation Under the Fair Labor Standards Act (FLSA)
