Bec #1 Business Structure

Front 1

A cop. is a legally separate entity distinct form its shareholders. To transfer interest in corp., one must simply ___________.
A partnerships( LP and GP) requires __________ to transfer interest in the partnership.

A limited liability company can follow ____________ rules, depending on how it is taxed.

Back 1

1.SELL HIS/HER STOCK
2. the consent of the other partners
3. THE PARTNERSHIP OR CORP.

Front 2

A Corp., initial BYLAWS shall be adopted by _________ or _________ or the board of directors may ratify the incorporator's initial bylaws. Generally, the bylaws are the rules of conduct for the corporation and are ________ contained in the articles of incorporation as they are usually bulky.
The __________ typically note such items as the company name, the comp. address, the names and the addresses of persons composing the initial board of directors, the number of authorized shares, the incorporator's name and address, and the registered agent's name and address, among other items.

Back 2

1. THE INCORPORATORS OR THE BOARD OF DIRECTORS
2. NOT
3. THE ARTICLES OF INCORPORATION

Front 3

What corp. can :
have more than 100 shareholders
have a nonresident alien as a shareholder
has a disadvantage of double taxation when
it pays dividends to its shareholders

Back 3

C corp

Front 4

Answer YES or NO for PROPRIETORSHIP, S CORP. C CORP. AND LLPARTNERSHIP
1. Tax- free distributions and contributions
2. Earnings accumulate tax-free
3. Not subject to personal holding tax
4. No double taxation of income
5. Single individual as management
6. Corporation as member/multiple members allowed

Back 4

PROPRIETORSHIP
1. Yes
2. Yes, pass through individuals but no entity tax
3. Yes
4. Yes
5. Yes
6. No

S CORP.
1. Yes, under certain circumstances
2. Yes, pass through individuals but no entity tax
3. Yes
4. Yes
5. Yes
6. No

C CORP.
1. No
2. No
3.No
4. No
5. No
6.Yes

LLPARTNERSHIP
1. Yes
2. Yes, pass through individuals but no entity tax
3. Yes
4. Yes
5. Yes
6. Yes

Front 5

What Require shareholder's approval and what not?
Dissolution
Purchase of 55% of another corp. stock
Merger

Back 5

Dissolution and Merger Require shareholder's approval

Front 6

A __________ is an association of persons or entities with the intent of engaging in a Single Business Venture for PROFIT

Back 6

JOINT VENTURE

Front 7

___________is the simplest form of business ownership. It is NOT considered an entity separate from the business; nothing needs to be file unless req. by the state.

Back 7

A SOLE PROPRIETORSHIP

Front 8

List major disadvantages and advantages of sole proprietorship.

Back 8

disadvantages:
1. is personally liable fro ALL obligations of the business.
2. limited life
advantages:
1. not double taxation
2. sole decision maker

Front 9

The key difference between a Joint Venture and a GP is the fact that JV is formed for __________.
JVs are treated as a Partnerships in most legal aspects

Back 9

SINGLE TRANSACTION OR PROJECT OR RELATED SERIES OF TRANSACTIONS

Front 10

A GP is similar to a sole proprietorship EXCEPT _______

Back 10

that there are at least TWO parntners

Front 11

List disadvantages and advantages of GP.

Back 11

disadvantages :
1. partners are personally liable for obligations of the partnership
2. Transfer of partners interest must be approved by ALL GPs.,
3. limited life of the GP
Advantages:
1. no double taxation

Front 12

All partnerships are assumed to be _________ unless otherwise stated.

Back 12

GP

Front 13

_________ is a change in the relationship of the partners caused by any partner ceasing to be associated in the carrying on of the business.

Back 13

DISSOCIATION

Front 14

In case of _________ - partners change but the partnership may or may not continue.
In case of __________ business is wound up, then the entity is terminated.

Back 14

DISSOCIATION
DISSOLUTION

Front 15

When a partner Dissociates, the partner's right to participate in management ceases.
Actual authority ends but __________ authority continues until the third party given notice.

Back 15

APPARENT

Front 16

Partners are ___________ for all contracts entered into and All torts committed by other partners withing the scope of the partnership business or which are authorized.
Under ___________ liability , each partner is personally and individually liable for the _________ amount of all partnership obligations.

Back 16

PERSONALLY LIABLE
JOINT AND SEVERAL
ENTIRE AMOUNT - 100%

Front 17

Each partner owes a _________ DUTY to GP and is bound to use P-p property and his best efforts for the benefit of the Partnership.

Back 17

FUDUCIARY

Front 18

LLP ________ have a perpetual life, unless provided otherwise.

Back 18

DOSE NOT

Front 19

Limited partners in LLP are like _________, they contribute capital , but _________ participate in the management of the partnership.

Back 19

SHAREHOLDERS
DO NOT

Front 20

Unlike a GP, if there is No agreement, Profit and Loss allocations in LP are based on ____________

Back 20

CAPITAL CONTRIBUTIONS

Front 21

________ is a form of business entity that offers its owners ( called members) one of the main advantages of the corporate form of business - they are not personally liable for the obligations of the company and all of the tax advantages of a partnership - flow though taxation.

Back 21

LIMITED LIABILITY COMPANY

Front 22

A LLC is a __________ business that combines characteristics of corporations, partnership and LP.

Back 22

HYBRID

Front 23

Generally, ________ may participate in management of LLC

Back 23

ALL MEMBERS - each member will be an agent of the LLC.

Front 24

An LLC is formed by filing ___________ with the secretary of state.

Back 24

ARTICLES OF ORGANIZATION

Front 25

Voting strength of LLC members are _________ and is based on ___________

Back 25

NOT EQUAL
CAPITAL

Front 26

Profit and loss allocation for the LLC members is based on __________ and is similar to LP.

Back 26

CAPITAL
GP and LLP - is EQUAL , unless otherwise agreed

Front 27

List + and - of the LLC

Back 27

+ Limited liability of members, liable only for his own torts
- may NOT transfer all of his interest without the consent

Front 28

_________ is a legal entity distinct from its owners - called Shareholders, and menages.

Back 28

A CORPORATION

Front 29

Creation of the Corp. requires filing a document called ____________ with the state.

Back 29

THE ARTICLES OF INCORPORATION

Front 30

_________ do not have the power to menage the day-to-day operations of a Corp.
Management power is vested in ___________.
They usually delegate their power to run the day-to-day operations to __________, whom they select.

Back 30

STOCKHOLDERS
DIRECTORS
OFFICERS

Front 31

List + (3) and - or Corp.

Back 31

1. Not personally liable
2. perpetual life
3. easy to transfer interest in the Corp. - sell

- Double Taxation is main disadvantage

Front 32

The tax laws permit certain Corp. to elect to be Taxed like partnerships and yet retain the other advantages of the Corp. form

Back 32

S corp.

Front 33

There are number of restrictions on S Corp. (5)

Back 33

1. No more than 100 members
2. Shareholders must be individuals, estates, or certain trusts
3. must be domestic corp.
4. one class of stock
5. foreign shareholders are not allowed.

Front 34

An agreement among the third party, the corp. and the promoter that the third party will release the promoter and substitute the Corp.

Back 34

NOVATION

Front 35

_____ are the rules for running the corp.

Back 35

BYLAWS

Front 36

If the incorporators made a good Faith attempt to incorporate - the doctrine is called

Back 36

De Facto

Front 37

Foreign corp. is a corp that is ___________
It must obtain a ____________ to transact business.

Back 37

not incorporated within the state

Certificate of Authority

Front 38

Individually _________ have no right or power to act - they are not agents but do owe a fiduciary duty

Back 38

DIRECTORS
CAN ACT AS A GROUP

Front 39

Corporations need _________ profits and losses among their shareholders

Back 39

NOT allocate

Front 40

GR, Shareholder ________ the right to a dividend UNLESS and until the dividend is __________ by the board.

Back 40

DO NOT HAVE
DECLARED

Front 41

What is preemptive rights?

Back 41

Right to purchase some shares to maintain their proportional voting strength

Front 42

What is Dissenting shareholder appraisal rights?

Back 42

Shareholder who is dissatisfied with most fundamental corp. changes have an opportunity to "dissent" and demand that the corp. pay them the Fair value of their shares rather than remain shareholders of a fundamentally changed corp.

Front 43

A partnership that has no stated duration is called a __________

Back 43

Partnership at will

Front 44

A Corp. may be authorized to
__________ its officers for liability incurred in a Suit of Stockholders.

Back 44

INDEMNIFY

Front 45

a partnership that has no stated duration is called

Back 45

a partnership at will

Front 46

A limited partnership and a corp. are both created under_______ and must __________

Back 46

a statute
and must file a copy of their certificate with the proper state authorities.

Front 47

In general, the shareholders must approve any MERGER or CONSOLIDATION except for

Back 47

a Short-form merger - if 90% of the stock was acquired.