Business Law Test 3 Ch 20 Set 1

Front 1

is not a true business entity because it consists of only an individual operating a business.

Back 1

a sole proprietorship

Front 2

Done by an individual
May have a fictitious name
Example: Ralph Jones d/b/a Spuds Brewery
No formal requirements for formation
May have to publish d/b/a name

Back 2

formation of a sole proprietorship

Front 3

sole proprietorships usually get funding from ------- and ------ because their business capital needs are small

Back 3

loans and government assistance

Front 4

T/F Because financing for a sole proprietorship is based on the sole proprietors credit rating and assets, the proprietor is personally liable for the business loan, and his or her assets should a default occur.

Back 4

TRUE

Front 5

sole proprietors can claim tax ------ associated with the business. the income of the business is the income of the sole proprietor and is report on the individuals income tax return

Back 5

losses

Front 6

Owner claims all income and losses
No separate filing requirement

Back 6

Tax Consequences of a sole proprietorship.

Front 7

All assets with one person. truly centralized management.

Back 7

management and control of sole proprietorships

Front 8

Business can be sold—property, inventory, and goodwill
Owner will usually sign a non-compete agreement
Upon death the heirs of the owner would inherit the property operate it if they choose.

Back 8

Transferability of Interest of a sole proprietorship

Front 9

Governed by the Uniform Partnership Act (UPA) which has been adopted in 49 states.

Back 9

partnerships

Front 10

An association of two or more persons to carry on as co-owners, a business for profit
Can include corporations and natural persons

Back 10

partnership

Front 11

who controls In absence of a partnership agreement

Back 11

Uniform partnership act (UPA)

Front 12

Revised Uniform Partnership Act (RUPA)(1994)—adopted in --------------

Back 12

nine states

Front 13

partnerships are formed ----------- by agreement. Or its formation can be implied by the ongoing ------------

Back 13

voluntarily, conduct of the parties

Front 14

T/F in certain circumstances, courts infer that a partnership exists even if the persons involved say they are not partners.

Back 14

True

Front 15

arises because the behaviors of the principals lead other to believe there is a partnership

Back 15

partnership by implication

Front 16

if two or more parties share the profits of a business, it is ------ ----- evidence that a partnership exists.

Back 16

Prima facie (means the presumption that a partnership exists.

Front 17

the presumption of partnership by profit sharing can be overcome if someone received profits what reasons?

Back 17

rent, wages, annuity to widow or estate, payment for goodwill

Front 18

another way someone can be held a partner involuntarily is through

Back 18

Partnership by Estoppel (or Ostensible Partner)

Front 19

Results when someone allows the inference to be made that he/she is a partner
Allowing name to be used to get a loan

Back 19

Partnership by Estoppel (or Ostensible Partner)

Front 20

Capital contributions of partners
Loans by partners
Outside loans

Back 20

sources of funding for partnerships