Location, Location, Location ACC 543 Location, Location, Location White water rafting has exploded onto the adventure sports scene in the last 10 years. This explosion has broadened the business market for rafting companies in Oregon, Idaho and Colorado. In order to open a new rafting business research must be conducted into the legal ramifications pertinent to the area. Of direct concern are the legal aspects of real property, personal property, business insurance, and environmental issues and regulations.
Evaluate the legal aspects of acquiring, holding, and disposing of real property Sole proprietors, corporations, limited liability companies, and partnerships can receive, hold and transfer title to real property in the same manner as individuals. As a sole proprietor, the client will retain unlimited liability and therefore all investment will be at risk, including real property. A corporation can also own property, but cannot own property in joint tenancy because of the corporation’s perpetual existence.
Corporations will generally hold title to a property in severalty or as a tenant in common, if the property is co-owned with another corporation or individual. If the corporation is set up as a C Corporation, the company and its shareholders are subject to double taxation. The corporation and the owner must both pay tax on the profits and the dividends. Any losses incurred cannot be passed to the shareholders so if the property is sold at a loss in the future, any losses that the corporation could not take cannot be passed on to the owner. Real property is typically transferred through a sale, or conveyance.
When the client decides to sell the property, they can list it with a real estate agent who will then market and sell the property. The risk that the client will encounter will more likely be in the area of riparian rights or eminent domain. Riparian rights are part of a constitutional amendment that gives the United States Congress the overall rights to all navigable waters within the US. When purchasing and building upon real property near a waterway, the client must ensure that the intended use of the waterway does not materially interfere with the quality or quantity of use by others.
The rights are not limited by the location or the time when the property was purchased. Great care must be extended when building boat launches or other boating structures to ensure that they do not obstruct the use of the river by other individuals. Evaluate the legal aspects of acquiring, holding, and disposing of personal property Personal property is that property, which is considered to be movable or the property that can be moved from one place to another. This property is categorized into two parts that is the tangible and the intangible property.
The tangible property can be understood as the property, which is mobile that can be sensed and touched also. In this category, the land, building, furniture etc are included. On the other hand, intangible property consists of the negotiable instruments, goodwill etc. During the acquisition of the personal property, the buyer and seller should pay equal attention towards the contract, during the purchase of the property, whether, all the pre-decided conditions are incorporated or not. It is important to conduct the transaction with the consent of the parties.
The amount decided by the parties should be fair and according to the current market rate; so that any problem should not crop up in the future. The legal aspect related to holding, undertakes the issues related to the purchase of the property. The next aspect discussed is to possess the right of ownership by holding the property. If the buyer of the property has fulfilled his obligations related to the payment of the property, then, he is free to use the specific property. The last step follows the procedure of the disposition of the property.
This point focuses on the fact that after gaining the ownership of the property, the buyer is considered to be the owner of the property and now, the owner is free to resale it. If the owner finds that the property is no longer providing benefits to him, then also, the property can be sold out. Additionally, if the property’s term with the owner is complete, then also he can go for its disposal. If the owner had not made the full payment for the property, then, he is required to get the consent of the original owner and thereafter, sale the property; otherwise, his behavior would not considered to be legal.
Analyze the business use of insurance for various risks Various forms of insurance will need to be acquired in order to minimize the risk of performing business as a river rafting company. The main sources of risk the company will face are injuries to our clients while on the river, injuries to our employees while performing their occupational duties, damage to the rafts or other equipment while being used on the river and damages to our mobile home office on the riverbank most likely due to a flood.
The types of insurance that will minimize the monetary loss and liability the company will face from these events are two forms of professional liability insurance, worker’s compensation insurance, property insurance and business interruption insurance. Property insurance will compensate the business for the damages to our office in the event of a flood or other disaster while business interruption insurance will provide the business with the lost revenue that occurred due to the inability to continue operations after the disaster. The insurance laws regulating these two insurance forms are consistent in Oregon, Idaho and Colorado.
Worker’s compensation insurance will provide our employees with compensation in the event they are injured on the job and can not continue to work effectively. Worker’s compensation is mandatory in all three states and is used as an exclusive remedy, so it prevents the ability of our employees to sue the company in the event of an accident. The two forms of liability insurance are on-water and floater liability insurance. These policies will provide compensation for our clients in the event they are injured while on the river and will cover any physical damages the raft and other equipment may incur while on the river.
Colorado will have the lowest insurance premiums out of the three states for the liability insurance due to their enhanced tort reforms. They have the lowest caps on punitive and non-economic damages, which lowers the total damages the insurer will provide the plaintiff in the case of a claim thus increasing the insurers profitability and lowering the premiums. Idaho and Oregon also have tort reforms, but not to the same extent as Colorado. Identify Environmental Issues and Regulations Related to the sites Environmental issues and regulations are an important aspect of consideration when starting a white water rafting business.
One such issue is water rights. Water rights determine who has the rights to use the water area and for what purpose. In the case of Maupin, Oregon, the State of Oregon acquired ownership of all tidally influenced waters and navigable waters at statehood in 1859. The state owns the riverbed and riverbanks up to the line of ordinary high water. As such, the public “has a right to use the river and its bed and banks up to that line” (Common Waters of Oregon, 2009). Idaho and Colorado have similar state laws regarding the waterways. A second environmental concern with regard to the three sites is the regulations governing raw waste.
As most white water rafting sites are located in remote areas sewer systems are not always available. In order to operate from a site the company must adhere to the raw waste regulations for the area, be it septic or temporary bathroom requirements. These regulations are often directly related to the Federal Clean Water Act, which sets water quality standards for defining “which bodies of water can be used for public drinking water, recreation (such as swimming), propagation of fish and wildlife, and agricultural and industrial uses” (Cheeseman, 2007, p 705).
Fire is another area of concern in the three sites. The potential remote nature of the sites requires that the organization familiarize itself with the fire regulations and resources in each area. Many rafting communities are located in Bureau of Land Management areas and are governed by Federal fire prevention and containment regulations. Conclusion The Three sites; Buena Vista, Colorado, Maupin, Oregon, and Horseshoe Bend, Idaho are all established rating communities.
Evaluating the sites based on the above criteria as well as proximity to a large urban area, area rafting support, competition base, and diversity of floats available Horseshoe Bend, Idaho is recommended. While the business insurance in Idaho is slightly higher the offsets in regard to ease of access to transportation and accommodations outweigh the expense. Furthermore it is recommended at this time that the company use its existing trailer while establishing the business. References Common Waters of Oregon. (2009). Our rights to use Oregon’s Rivers. Retrieved from http://www. oregonriverrights. com/admissions_act. tm Cheeseman, H. R. (2007). Business law: Legal environment, online commerce, business ethics, and international issues (6th ed. ). Upper Saddle River, NJ: Pearson. Matthews, S. F. & Rottmann, L. F. (2009). Legal Aspects of Farm Partnerships. Retrieved from http://extension. missouri. edu/publications/DisplayPub. aspx? P=G511 (n. d. ). Congressional budget office. Retrieved from http://www. cbo. gov/doc. cfm? index=5549&type=0&sequence=2#figure1 Roark, B. , & Roark, R. (2006). RIPARIAN RIGHTS. Concise Encyclopedia of Real Estate Business Terms, 129-130. Retrieved from Business Source Complete database.