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52 Cards in this Set

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  • Back
What type of business is the most common?
Propietorship
Is the proprietor's business a seperate entity
Nope
To use a business name other than your own name you must..
Register your Ficticious name "Nacny's Nail Salon"
What are the consiquenes if you don't register your ficticious name?
Its a 2nd degree misdenminor and u can't sue people without the name being registered.
A Propietors liability is..
unlimited
T or F
A propietorship wont last through death, disability, or retirement
True-If someone tried to collect on a warranty that had been given from a propietorship that was inherrited the heir would not have to honnor it since this is considered a new propietorship
How does a propietorship raise capital?
Personal funds or loans
What number is required for sole proprietorship or local business liesence?
EIN or Employer Identification Number
Is a sole propietorship a seprate tax paying entity?
No the income or loses are reported on the owners tax return
The correct form of business organization can reduce..
Taxes, liability and conflict
If an entreprenure doesn't choice what type of business to be..
The law will set a default option
What are the advantages to a Proprietorship?
-Low cost to start
-Propietor recieves all profits
-Proprietor makes all decissions
-Easily transferred or sold
What are the disadvantages of a propietorship?
-Unlimited liabilily
-Entity wont survive death, retirement, or disabililty
-May only raise funds through personal funds or personal loans
A contractual relationship where the owner of a trademark, trade name, commercial symbols, operation,system, process or copyright allows another person or entity to use that property, operation, process or system.
Franchises
Advatanges to franchising...
-Franchisor can reach new markets while franchisee absorbs most the risk.
-Franchisee has access to Franchisor's knowledge and resources.
-Consumers are assured of uniform product qualilty.
Disadvatnages to Franchising...
-Must meet franchisors standards or risk loosing franchise
-Little control over the business
The Franchisor manufactures a product and a retail franchisee to distribute the product to the public.
Distributor Franchise
THe Franchisor licenses the franchisee to make and sell it's products or disribute services to the public from a retail outlet serving an exclusive territory.
Chain Store Franchise
The Franchisor provides a secret formula or process to the franchisee. The franchisee manufactures the product and distributes it to a retail dealers.
Manufacturing or Process Plant
_______Protects automobile dealership franchisees whose franchisors impose unreasonable demands and then terminate the franchise because of franchisee's filure to satisfy.
Automoblie Dealer's Franchise Act
_______ Precribes the grounds and conditions under which a franchisor may terminate or decline to renew a gas station's franchise.
The Petroleum Marketing act
Do Franchisors have to disclose material facts like bankrupcy, required purchases or how many franchises allowed in a given area to prospective franchisees?
Yes under the Federal Trade Commision
Franchise agreements usually cover the following things:
-Payment (Royalties)
-Business Premises
-Location
-Quality controls
-Price controls
-Duration
Franchise Agreements state that termination must be_____
For Cause
If a Franchise agreement is terminated without just cause..
The franchisee can sue
How do you become a Franchisee..
You Apply!
T or F
Franchisors determine the prices.
False, they may only suggest.
An association of two or more persons* carrying on a business for profit.
Partnership
In a partnership the requirement of "two or more persons" includes...
Multiple actual people, an LLP and a Corp., a person and a Corp., ect...
T or F
Partnerships are largely governed by statutory law.
True
What are the advantages of a Partnership?
-The Partnership is a distinct entity of its partners.
-They are easy and inexpensive to form
In forming a Partnership documents that may be filed with the secretary of State:
Partnership registration, Statement of authority (who can enter into translation) and Fictisious name registration.
Disadvantages to a Partnership:
-Partners may have personal liability for partnership obligations.
What are the options for sueing a partnership?
Creditor can sue the partnership and all the partners or partnership and one "deep pocketed" partner.
What is on a partnership agreement?
-Partnership's Name
-Decsription of business
-Listing of present partners
-A statement of contributions made by the present partners
-Method for dividing dividends and loses.
-Withdraw or addmission of partners
-Methods of transfering interest
-The Partnerships Term
This Partnership has a fixed term or until the accomplishment of a particular undertaking. Ending early by a partner is wrong.
Partnership for Term
This a Partnership that is silent as to the duration. Any partner can leave without liability.
Partnership at Will
Just read me...
The Uniform Partnership Act (with RUPA amendments) is a Model Partnership statue drafted by the National Conference of Commisioners on Uniform State Laws.
Florida adopted the partnership laws of..
RUPA
Unless the partership agrees otherwise, they follow the RUPA rules that:
-Each partener has an equal vote.
-Each partner has equal rights in management and a duty to manage.
T or F
Any partnership act not in the ordinay course of business must be approved by all partners.
True
Ex. Opening a second store must be a unanimous vote.
When a partner voluntarily assigns his interest in the partnership to a third party.
Assignment of Partnership Interest
When a partner's interest is subjected to a judgement creditor's lien.
Lien on Partnership's Interest
T or F
Partners usually get a set salary
False the recieve profits or loses..
Does a partnership file taxes?
Yes, but it doesnt pay income tax. The parnters individually put their income or loses on the own income statement.
Partners books must be kept accessible to ________.
All partners
Property belongs to a partnership if:
-Its bought with partnership funds.
-Its Transferred to the partnerships name.
Partners are in a _____ relationship with eachother.
Fiduciary: Trusting
A duty that a partner owes not to act adversely to the interests of the Partnership
Duty of Loyalty
How to break a duty of Loyalty in a Partnership...
-Self-deal without permission
-Compete with the partnership without permission
-Make secret profits
-Disclose confidential info
-Misuse partnership property
The obligation partners owe to use the same level of care and skill that a reasonable person in the same position would use in the same circumstances.
Duty of Care
_____ doesn't breach the duty of care
Honest Mistakes