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9 Cards in this Set
- Front
- Back
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Define a sole proprietorship |
An unincorporated organization with one legal owner; business obligations = personal obligations |
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Define a partnership and joint liability |
2+ individuals who create an organization in pursuit of profit; business obligations = personal obligations Joint liability is a liability shared by 2+ individuals who are both responsible for full amount of debt |
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What is the Partnership Act |
Provides mandatory rules/outlines with respect to the existence of a partnership (such as all PP&E being exclusively used for the partnership, and all partners have a managerial interest) and what the relationship means to outsiders; partners owe fiduciary duties to each other |
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What are the components of a Partnership Agreement? |
Addresses partnership creation, capital contribution, decision-making, profit distribution, dissolution... |
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Define Joint and Severe Liability |
Individual and collective liability for a debt; each individual party is liable for the entire debt as well as collectively liable From a practical point of view, if I have more money versus my partner, the bank/supplier can go after me to get renumeration |
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Define a Limited Partnership |
A partnership where liability is limited by capital contribution At least one partner has unlimited liability (General Liability) |
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Define a Limited Liability Partnership (LLC) |
A partnership where partners have unlimited liability for their own malpractice, but have no liability for other malpractices |
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Define a Corporation |
A distinct entity with a legal entity with its own set of obligations |
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Show the 6 types of business arrangements |
1. Franchise - permitting another to use a trademark/name (McDonalds) 2. Joint Venture - 2+ businesses group to undertake a project (Toyota + Subaru for the Scion FR-S/Subaru BR-Z) 3. Strategic Alliance - 2+ businesses co-operate for technology sharing, research (Renault-Nissan) 4. Distributor/Dealership - selling another product (Costco) 5. Sales Agency - selling products on another's behalf; acting like an agent (Car dealerships where they report back to parent companies) 6. Product Licensing - authorizing another to make/distribute products with a trademark/legal right (Warner-Bros. and DC Comics Movies) |
