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47 Cards in this Set

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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.
1.SELL HIS/HER STOCK
2. the consent of the other partners
3. THE PARTNERSHIP OR CORP.
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.
1. THE INCORPORATORS OR THE BOARD OF DIRECTORS
2. NOT
3. THE ARTICLES OF INCORPORATION
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
C corp
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
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
What Require shareholder's approval and what not?
Dissolution
Purchase of 55% of another corp. stock
Merger
Dissolution and Merger Require shareholder's approval
A __________ is an association of persons or entities with the intent of engaging in a Single Business Venture for PROFIT
JOINT VENTURE
___________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.
A SOLE PROPRIETORSHIP
List major disadvantages and advantages of sole proprietorship.
disadvantages:
1. is personally liable fro ALL obligations of the business.
2. limited life
advantages:
1. not double taxation
2. sole decision maker
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
SINGLE TRANSACTION OR PROJECT OR RELATED SERIES OF TRANSACTIONS
A GP is similar to a sole proprietorship EXCEPT _______
that there are at least TWO parntners
List disadvantages and advantages of GP.
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
All partnerships are assumed to be _________ unless otherwise stated.
GP
_________ is a change in the relationship of the partners caused by any partner ceasing to be associated in the carrying on of the business.
DISSOCIATION
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.
DISSOCIATION
DISSOLUTION
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.
APPARENT
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.
PERSONALLY LIABLE
JOINT AND SEVERAL
ENTIRE AMOUNT - 100%
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.
FUDUCIARY
LLP ________ have a perpetual life, unless provided otherwise.
DOSE NOT
Limited partners in LLP are like _________, they contribute capital , but _________ participate in the management of the partnership.
SHAREHOLDERS
DO NOT
Unlike a GP, if there is No agreement, Profit and Loss allocations in LP are based on ____________
CAPITAL CONTRIBUTIONS
________ 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.
LIMITED LIABILITY COMPANY
A LLC is a __________ business that combines characteristics of corporations, partnership and LP.
HYBRID
Generally, ________ may participate in management of LLC
ALL MEMBERS - each member will be an agent of the LLC.
An LLC is formed by filing ___________ with the secretary of state.
ARTICLES OF ORGANIZATION
Voting strength of LLC members are _________ and is based on ___________
NOT EQUAL
CAPITAL
Profit and loss allocation for the LLC members is based on __________ and is similar to LP.
CAPITAL
GP and LLP - is EQUAL , unless otherwise agreed
List + and - of the LLC
+ Limited liability of members, liable only for his own torts
- may NOT transfer all of his interest without the consent
_________ is a legal entity distinct from its owners - called Shareholders, and menages.
A CORPORATION
Creation of the Corp. requires filing a document called ____________ with the state.
THE ARTICLES OF INCORPORATION
_________ 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.
STOCKHOLDERS
DIRECTORS
OFFICERS
List + (3) and - or Corp.
1. Not personally liable
2. perpetual life
3. easy to transfer interest in the Corp. - sell

- Double Taxation is main disadvantage
The tax laws permit certain Corp. to elect to be Taxed like partnerships and yet retain the other advantages of the Corp. form
S corp.
There are number of restrictions on S Corp. (5)
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.
An agreement among the third party, the corp. and the promoter that the third party will release the promoter and substitute the Corp.
NOVATION
_____ are the rules for running the corp.
BYLAWS
If the incorporators made a good Faith attempt to incorporate - the doctrine is called
De Facto
Foreign corp. is a corp that is ___________
It must obtain a ____________ to transact business.
not incorporated within the state

Certificate of Authority
Individually _________ have no right or power to act - they are not agents but do owe a fiduciary duty
DIRECTORS
CAN ACT AS A GROUP
Corporations need _________ profits and losses among their shareholders
NOT allocate
GR, Shareholder ________ the right to a dividend UNLESS and until the dividend is __________ by the board.
DO NOT HAVE
DECLARED
What is preemptive rights?
Right to purchase some shares to maintain their proportional voting strength
What is Dissenting shareholder appraisal rights?
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.
A partnership that has no stated duration is called a __________
Partnership at will
A Corp. may be authorized to
__________ its officers for liability incurred in a Suit of Stockholders.
INDEMNIFY
a partnership that has no stated duration is called
a partnership at will
A limited partnership and a corp. are both created under_______ and must __________
a statute
and must file a copy of their certificate with the proper state authorities.
In general, the shareholders must approve any MERGER or CONSOLIDATION except for
a Short-form merger - if 90% of the stock was acquired.