Business Law 1 Ch 38 & 39

Front 1

A business entity that combines the most favorable attributes of general partnerships, Limited partnerships and coorperations

Back 1

LLC

Front 2

What are the advantages of an LLC?

Back 2

Limited personal Liability.
Flexible management and operations.
Less restrictive ownership.

Front 3

What kind of owners are allowed on an LLC?

Back 3

Cooperations, Partners, and FORGIEN INVESTORS

Front 4

Who can Manage an LLC?

Back 4

Members or paid outside Managers

Front 5

What are the disadvantages of an LLC?

Back 5

Non-uniform state LLC statutes create uncertainty.
They use diversity jurisdiction where each partners resident state is taken into consideration.

Front 6

To form an LLC what has to be filed with the secretary of state?

Back 6

Articles of Organization

Front 7

How is taxation for an LLC?

Back 7

With two or more members they are default taxed like a partnership, but can elect to be taxed like a corp. Single owned LLCs are taxed like a Propietorship

Front 8

What are the liabilities of the mebers in an LLC?

Back 8

They are only reliable for capital contributions expect for personal guarentees.

Front 9

What is piecing the corperate vail?

Back 9

When a court decides to make someone in an LLC personally liable only used to promote justice

Front 10

All members participate in management and business matters are determined by a majority vote.

Back 10

Member managed LLC

Front 11

Managers are appointed and removed by members

Back 11

Manager Managed LLC

Front 12

What are the duties of care in and LLC?

Back 12

Managing members- Loyalty and Care
Non-managing member- must act in good faith

Front 13

How is profit allocated in an LLC?

Back 13

By their agreed upon value of contributions.

Front 14

T or F Amember has limited ability to sell or transfer his/her rights in the LLC

Back 14

True

Front 15

Can a personal creditor obtain a charging order on member's interests?

Back 15

Yes, they can obtain a lien on profits, take the company or even force forclosure

Front 16

An artificial being created by operation of law, with an existance separate from the individuals who own and operate it.

Back 16

Coperation

Front 17

what are the advantages of a coperation?

Back 17

Limited Liability
Cetralized Management
Ability to raise Capital
Transferability of Shares
Perpetual Existance

Front 18

What are the diadvatanges of a coperation?

Back 18

Expenses, Formalities, (required to hold a meeting once a year), regulations

Front 19

T or F Corperations are treated as aftificial persons.

Back 19

True thhey can sue, hold title or enter contracts in their name.

Front 20

What can corperations do with their profits?

Back 20

Keep them as reatined earnings or give them to shareholders.

Front 21

How is coperate profit taxed?

Back 21

Twice, once as profit and again on shareholders income statements.

Front 22

Which constitutional rights does a coperation not enjoy?

Back 22

Fifth amendment (silence), or Privileges and Immunities clause protection. They do enjoy protection from unreasonable search and seizures.

Front 23

A person who conceives of, organizes, and begins the coperation.

Back 23

Promoter (Stephen)

Front 24

Are coperations required to have any money to start a corperation?

Back 24

Yes by securities Laws

Front 25

What is the promoter liable for?

Back 25

Preincoperation contracts exectued in his/her name or the corp. name. The corperation has to adopt the contracvt in order to take the liability

Front 26

How can the promoter be relieved of their liability?

Back 26

Novation or new contract, upfront agreement up of transfered liabilty. The corp. must adopt the contract in order to take the liability.

Front 27

T or F
If the corp. adopts the contract the promoter is no longer liable.

Back 27

False the promoter is still liable.

Front 28

What is the first step of incorperation?

Back 28

Select a state.

Front 29

How many states can a corp be incorperated in?

Back 29

One, but that doesn't have to be they state business is done in.

Front 30

T or F
There are qualifications to do business in the states you aren't incorperated in.

Back 30

True

Front 31

What is the basic governing document of a corperation?

Back 31

Articles of incorperation

Front 32

What 6 things does the state of florida require to be contained in the articles of incorperation.

Back 32

Corp name, place of business and mailing address, capital structure, nam and adress of the registered agent, name and adress of the incorperator, and the signature of the incorperator.

Front 33

Where are the articles of incorperation sent?

Back 33

The secretary of state with a fee

Front 34

If you do business in a state other than the one you do business in who do u pay taxes to?

Back 34

The state you are incorperated in.

Front 35

What happens at the first meeting of the initial board of directors?

Back 35

-Adopt Bilaws
-Officers are elected
-Adopt a corperate seal

Front 36

An equity security that represents the purchase of a partial of ownership in a corperation.

Back 36

Stock

Front 37

What do common shareholders vote for?

Back 37

Directors and fundamental corperate matters (usually no other voting rights)

Front 38

What is the order of coperate powers? (6)

Back 38

-US constitution
-State constitutions
-State Statutes
-Articles of Incorperation
-Corporate bylaws
-Resolutions of the corperation's board of directors

Front 39

Name some implied powers.

Back 39

A corp has an inplied power to open a bank account. THey and an implied powerr to reimburse its employees for expenses.