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BLAW 308: Final
Terms in this set (52)
The owner has control and unlimited personal liability. Profits are taxed directly as income to the sole proprietor.
For most purposes, the partnership is not a legal entity, and each partner has equal control and unlimited liability, with profits that are taxed as income for partners.
Governed by an agreement between at least one general partner and at least one limited partner.
This partnership permits investors to share in the profits of a partnership but limits their liability to the amount they invest.
A corporation is a separate legal entity wherein the owners' liability is limited to the amount of their contributions and the profits are taxed as income to the corporation.
A corporation under federal tax law but is taxed like a partnership as long as it follows certain regulations.
Limited Liability Company
An unincorporated form of business organization that combines the tax advantages and management flexibility of a partnership with the limited liability of a corporation.
A business organization in which the members usually pool their resources together to gain some kind of advantage in the market.
Joint Stock Company
A partnership agreement in which company members hold transferable shares while all the goods of the company are held in the names of the partners.
A syndicate is an investment group that comes together for the explicit purpose of financing a specific large project.
A business organization governed by a group of trustees, who operate the trust for the beneficiaries.
A relationship between two or more persons or corporations created for a specific business undertaking.
A business that exists because of an arrangement between an owner of a trade name or trademark and a person who sells goods or services under the trade name or trademark.
Articles of Partnership
A written agreement that creates a partnership. Should include the partners' names, duration of partnership, the division of profit and loss, division of management duties, and capital contributions each partner will make.
Entitles the creditor to the partner's profits while the partner continue to act as a partner and engage in the partnership business.
Joint and Several Liability
A third party can choose to sue the partners separately or all partners jointly in one action.
Right of Survivorship
The rights in specific partnership property pass to the surviving partners.
Formation of the Partnership
Is created by the articles of partnership, which should include the name of each partner and the partnership, the duration of the partnership, how profits will be divided,the division
Each Partner has Specific Duties
Duty to be loyal
Duty of obedience
Duty of care
Each Partner has Specific Rights
Right to share management
Right to inspect books
Right to compensation
Right to partnership property
Interactions Between Partners and Third Parties
If a partnership has a liability, each partner has unlimited personal liability. All partners are jointly and severally liable for the commission of a tort by any partner.
The Revised Uniform Partnership Act
Governs partnerships in the absence of an express agreement.
Dissolution of the Business
Acts of partners, the operation of the law, and acts of the court can rightfully dissolve a partnership.
The dissolution does not violate the partnership agreement.
Winding Up the Business
The activity of completing unfinished partnership business, collecting and paying debts, collecting partnership assets, and taking inventory.
A partner who dissolves the partnership in violation of the partnership agreement can be held liable.
Termination of the Partnership
Once the partnership has been dissolved and the assets have been liquidated and distributed, the partnership had been terminated.
Consequences of Dissolution
A partner who wishes to dissolve or withdraw from the partnership must give notice of intent. Third parties should be contacted promptly to avoid creating additional for the partnership.
Limited Liability Companies
Formed by an agreement between members, each of whom has limited liability while receiving the tax breaks often afforded to those in a partnership. In addition, each member also gets a say in the management of the company.
A business incorporated in another country.
Articles of Incorporation
Corporation files with the state explaining its organization, may include a restriction on the duration of the corporation.
Rules and regulations that govern the corporation's internal management.
Certificate of Incorporation
A document certifying that the corporation is incorporated in the state and authorized to conduct business.
Closely held Corporations
Generally do not offer stock to the general public.
Corporation by Estoppel
Courts bar the corporation from denying its corporate status.
De facto Corporation
Has not met substantial elements of the incorporation process.
De jure Corporation
Has met substantial elements of the incorporation process.
If there is any error or omission during the incorporation process.
The particular state in which it is incorporated
States in which it conducts business but is not incorporated.
An individual who applies to the state for the incorporation on behalf of a corporation.
May earn profits, but do not distribute them to shareholders.
An agreement to substitute the third party for one of the two original parties in a contract and terminating the rights under it.
Begin the corporate creation and organization process by arranging for necessary capital, financing, and licenses.
Created by the government to help administer law.
Enjoy's the tax status of partnerships. Shareholders report their income from the corporation only once, as personal income.
Investors who agree to purchase stock in the new corporation.
Shareholders can authorize a third party to attend and vote in their place.
Right of First Refusal
a method of restricting stock transfer-ability.
When directors or officers violate their duty of loyalty.
Shareholder's Derivative Suit
When corporate directors fail to sue when the corporation has been harmed by an individual, another corporation, or a director, individual shareholders can file a suit.
Stock issued below its fair market value. is also individually liable for the difference between the price she paid for the shares an their stated corporate value.
Proof of ownership
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