John Stimson
United States
Menomonee Falls
Wisconsin
flag msg tools
Avatar
mbmbmbmbmb
Purely hypothetical question, but this comes up all the time in the various games I've played. I also saw a movie yesterday (a science fiction) where the government had laws stopping the following from occuring...

In short, does a sole proprietor have an obligation to perpetuate their successful business beyond the labor law notification periods, debt repayment, and other economic reasons? In other words, is there an obligation to perpetuate a successful business beyond ones own intrinsic desire to run said business?

For example, a person owns a successful manufacturing business. The owner has experienced success to the degree that he (and his heirs) could never spend the wealth they have accumulated and wishes to retire. For various reasons, this owner made no effort to sell the business. Rather, he opted to simply layoff all 1000 of his employees (with proper notice), close the doors, and retire.

Without regard to the economic sense this makes, can a person simply make this choice? I think in the US this is legal. Are there countries where the government could stop such a situation?


4 
 Thumb up
 tip
 Hide
  • [+] Dice rolls
Billy McBoatface
United States
Lexington
Massachusetts
flag msg tools
KGS is the #1 web site for playing go over the internet. Visit now!
badge
Yes, I really am that awesome.
Avatar
mbmbmbmbmb
Speaking as a sole proprietor of a successful business, the government has no say in whether my business stays open or not.

However, I have no full time employees. The laws may change if I do.
5 
 Thumb up
 tip
 Hide
  • [+] Dice rolls
Eric "Shippy McShipperson" Mowrer
United States
Vancouver
Washington
flag msg tools
badge
Ami. Geek.
Avatar
mbmbmbmbmb
It's an interesting question. I can't imagine such a successful businessman not making at least an attempt to sell the business.

That said, why shouldn't he be allowed to do that? I would think any country with a free market would allow it (and I would be shocked and dismayed to find out if that were not he case)

It seems like if a government will step in on something like that, they would also step in at all points along the way to make sure that the business doesn't fail (to employ the people). You're basically talking about a planned economy at that point.
5 
 Thumb up
 tip
 Hide
  • [+] Dice rolls
Society of Watchers
United States
Killbuck
Ohio
flag msg tools
badge
Avatar
mbmbmbmbmb
No, the government can't make someone run a business they don't want to. as long as the business appropriately finishes up all of its obligations to clients, suppliers, and employees.

However, if the government feels there is sufficient reason to continue the business, it may invoke eminent domain to acquire the land (paying the owner a fair value for the LAND per the Constitution) and all assets on that land and then continue said business. The government generally seems to continue to owning businesses longer than it absolutely needs to, so would likely then sell said business to someone willing to continue it.
3 
 Thumb up
 tip
 Hide
  • [+] Dice rolls
Jonny Lawless
United States
Bountiful
Utah
flag msg tools
Four crazy kids and happy as a clam!
badge
My name is Glenn! Long have I carried Cyrus's hopes and dreams, and now I bear the Masamune as well! Henceforth, I claim them as my own! I shall slay the Fiendlord Magus and restore our honor!
Avatar
mbmbmbmbmb
Slippery slope. What's the cutoff? You can't close the whole business. Can you close a branch? Division? Department? Individual?
6 
 Thumb up
 tip
 Hide
  • [+] Dice rolls
¡dn ʇǝƃ ʇ,uɐɔ ı puɐ uǝllɐɟ ǝʌ,ı
Canada
Chestermere
Alberta
flag msg tools
Life lesson: Hamsters are NOT diswasher safe.
badge
There are 10 types of people-- those who understand binary, and those who don't.
Avatar
mbmbmbmbmb
I agree that the government cannot dictate what the business owner decides to do. Even in a corporation, the government can't force you to remain open. A publicly traded corporation with stockholders and investors is a whole other ball of wax, however. Then the government will have something to say.

The example is too fanciful to be a case study, however. If you're a manufacturer with 1000 employees, you're simply not going to be a sole proprietor. You'll have incorporated very early on in the process.
There's just far too much personal wealth risk to remain a sole proprietor in a company of that size. Even with a 2-person operation, incorporation usually makes a lot of sense.

I also think that, ethically, any successful businessman would never screw over 1000 employees by laying them off. Sure you've got enormous wealth for yourself, but you couldn't sleep at night if you did that. And you'd risk someone running you out of town (or you'd be the most hated man in the town) if you did have no ethics.
5 
 Thumb up
 tip
 Hide
  • [+] Dice rolls
John Stimson
United States
Menomonee Falls
Wisconsin
flag msg tools
Avatar
mbmbmbmbmb
I agree this is fanciful, but FYI - I saw a public television special on Henry Ford. At one point Henry Ford was sole owner for Ford, and he indeed contemplated closing the entire company (to avoid unionization).


I was really wondering about other countires...


edit - typos


MABBY wrote:
I agree that the government cannot dictate what the business owner decides to do. Even in a corporation, the government can't force you to remain open. A publicly traded corporation with stockholders and investors is a whole other ball of wax, however. Then the government will have something to say.

The example is too fanciful to be a case study, however. If you're a manufacturer with 1000 employees, you're simply not going to be a sole proprietor. You'll have incorporated very early on in the process.
There's just far too much personal wealth risk to remain a sole proprietor in a company of that size. Even with a 2-person operation, incorporation usually makes a lot of sense.

I also think that, ethically, any successful businessman would never screw over 1000 employees by laying them off. Sure you've got enormous wealth for yourself, but you couldn't sleep at night if you did that. And you'd risk someone running you out of town (or you'd be the most hated man in the town) if you did have no ethics.
3 
 Thumb up
 tip
 Hide
  • [+] Dice rolls
jeff
United States
Cumberland
Rhode Island
flag msg tools
badge
Avatar
mbmbmbmbmb
stayman wrote:
. For various reasons, this owner made no effort to sell the business. Rather, he opted to simply layoff all 1000 of his employees (with proper notice), close the doors, and retire.


I'm assuming he is not incorporated...

In short yes he can do this. He will close the doors then have to close his books. Make sure all debt obligations are handled. Then file a final Schedule C with his 1040 for that current fiscal/calandar year.

Is it ethical? not really... the least he could do is "sell" the business to some of the employees, make a couple of bucks, they stay employed and now are in charge.

4 
 Thumb up
 tip
 Hide
  • [+] Dice rolls
Scott Russell
United States
Clarkston
Michigan
flag msg tools
badge
Avatar
mbmbmbmbmb
Slap Shot addressed this issue. In it, it was ok legally to close the team for a loss for tax purposes.

In Atlas Shrugged, the government required the successful businesses to stay open (and kept the unsuccessful ones open, too).


2 
 Thumb up
 tip
 Hide
  • [+] Dice rolls
The neutral evil villain known as
United States
Indiana
flag msg tools
badge
Ow quit it.
Avatar
mbmbmbmbmb
Here in Indiana, a few years back, A guy that owned a comic shop shut down all his stores but one because he was old and tired. They all were making money. Employees fired, none rich enough to buy him out.
It was a sad sad day. I used to get my games from one of them.
3 
 Thumb up
 tip
 Hide
  • [+] Dice rolls
Pieter
Netherlands
Maastricht
flag msg tools
Good intentions are no substitute for a good education.
badge
I take my fun very seriously.
Avatar
mbmbmbmbmb
At least in The Netherlands, a company owner has an obligation towards his employees. He can't just fire them -- which he has to do first if he wants to close down his business (or he can keep on paying them without them doing any work, of course, but then the business still exists apart from the fact that it isn't doing any, you know, "business"). And firing employees you cannot just do, there are very strict limitations on that, and if you want to go around those limitations, it has to be by means of a court case. And I do not think that any court would accept "I am no longer interested in running the business, your honor, so I just want to close it down without giving anyone else the opportunity to take over."

So I think that in practice, in The Netherlands a company owner cannot just close down (unless it is a one-man business). Of course, he can sell the business and then get out, or attempt to sell it and when that fails, apply for termination of the company in court.

This is all under the caveat that I Am Not A Lawyer (but have seen one on tv).
3 
 Thumb up
 tip
 Hide
  • [+] Dice rolls
Hiding Tiger
Australia
Parmelia
Western Australia
flag msg tools
Grrrrrrrrowf!
badge
Grrrrr aaarrrggghhh
Avatar
mbmbmbmbmb
I know of two (one directly, one a friend-of-a-friend) successful small businesses in Australia that closed down because the owners wanted to retire and they couldn't find a buyer. Their employees either couldn't or wouldn't take over, and nobody else was interested.
2 
 Thumb up
 tip
 Hide
  • [+] Dice rolls
Front Page | Welcome | Contact | Privacy Policy | Terms of Service | Advertise | Support BGG | Feeds RSS
Geekdo, BoardGameGeek, the Geekdo logo, and the BoardGameGeek logo are trademarks of BoardGameGeek, LLC.