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82 Cards in this Set
- Front
- Back
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Business Organizations
Considerations of Starting a Business (5) |
Creation
Continuity Control Taxation Liability |
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Creation
Continuity |
sets up steps, costs
tied to owner, stability, how does is dissolve |
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Control
Liability Taxation |
egos, deadlock
owner, liable how it is taxed |
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Types of Entities (5)
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Sole properietorship
Partnership Limited Partnership Corporation (C) Subchatper (S) Corporation |
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Sole Proprietorship Creation
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one person, least expensive, easiest, one owner, need a license,
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Fictitious Name Registration
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file if making business not in your own name
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Sole Proprietorship Liability
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debts of business are the debts of the owner. leaving with a huge risk of liability, buy insurance
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Sole Proprietorship Taxation
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No seperate tax return, taxes go on scheudle c on owners tax returns, owner keeps all profits and pays tax
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Sole Proprietorship Termination
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whenever the owner stops dong business, no forms must be filed
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Partnership Creation
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two or more people decide to start a business. (husband, friends corporation). Cost is minimal a license and article of partnership
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Partnership Profits/ Losses
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in an absence in agreement profits/losses are equally distributed unless there is another agreement
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Partnership Duty/ Management
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Usually equal rights and set duties. They owe a duty of loyalty to their partners (trustees) Cannot gain an advantage
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Partnership Liability
Rights of Creditor |
each has unlimited liability for the debts of the business (100% each)
must go first after partnership assets then after individuals assets |
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Partnership Binding of Decisions
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if a partner makes a choice w/o the other it binds both into the agreement.
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Partnership Taxation
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not a taxable entity, each individual will put their profits/losses on their tax returns on K-1. they must file an informational return but pay no taxes
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Partnership Termination
2 Step Process -Dissoluiton - Winding up |
change in partners terminates partnership.
dis. - partner ceases to be associated with the partnerships (retires/dies) winding- collects assets and distributes them to the partners |
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Family Limited Liability Partnership
Creation |
business where partners are all related to each other. Used as an estate, client, asset transfered to other family members.
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Corporation (C) Creation
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seperate entity created by state charter, owners get stock, expensive to create bc of legal fees and costs. Articles of Incorporation
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Articles of Incorporation (6)
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name captial structure
purpose internal organization duration registered office |
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Corporation Continuity
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Stays in business forever does not change with the death of sale of the stock holder
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Corporation Management
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share holders elect board of directors, directors set policy and appoint officers. Offices run business on a daily basis
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Obligation of Corporation Directors
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business judgement rule guides the conduct of the directors. must use best judgement, can be liable for criminal acts of the corporation
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Liability of Corporation
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owners liability is usually limited to capital contribution. owner can be liable if they garantees corporate debt. (personally liable for articles of business), must pay taxes
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Corporation Taxation
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double taxation business and shareholders both pay taxes
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Sub chapter S Corporation
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small business, profits and losses on personal tax returns, same as corp except stockholders and liabilty not on stockholders
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Limited Liability Company (LLC)
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hybrid from a business entity, limited liabilites to owners, no stockholder meetings, treated as sole proprietorship OR as corporation, all members participate
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Franchises
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arragnement in which he owner of a trademark allows another to offer its products for sale in different geographical area
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The Franchisor
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is the owner of the business idea. spells out relationship between entities including payments and how to run it
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The Franchisee
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is the owner of the store offering the item to the public.
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Termination of Franchises
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late payment of fees
dont follow rules or file for re-organization when filing for bankruptcy. |
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Acts of Franchises
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must act in good faith and fairly deal with one another, ex: opening the same franchise a block away
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International Law Description
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international transactions
1/2 net profits are international transactions. countries try to protect their own, a priviledge not a right |
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International Law
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governs the relationships among countries.
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Classifications of International Law
(2) |
Public
Private |
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Public
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examines relationships among nations and uses rules, treaties, and conventions that are binding on all countries
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Treaty
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determines rules which world traders can conduct business activities within other territories
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Types of Treaties
(5) |
Bilateral
Multilateral Authority for US Convention Protocol |
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Bilateral
Multilateral |
agreement between 2 nations
agreement between 2 or more |
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Authority for US
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the constitution Article Two president has the power with the consent of the senate to make treaties
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Convention
ex. Warsaw |
agreement negogiated by members if international organizations which is documented to be adopted by other nations
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Warsaw Convention
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limited damages originally to 75000 on international flights unless there is wilfull misconduct on the part of the airline
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Protocol
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treaty of international agreement that supliments a previous agreement. Parties of earlier are not required to adopt the new one
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Private International Law
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looks at laws appilicable to private parties in their business affairs when they are from different nations
ex: german car sold in us |
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Lex Mercotoria "law merchant"
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rules and regulations to solve problems through trade practices, created by commerical entities.
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Harter Act
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sets forth the liability of ships for cargo losses between US port and international countries
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Foreign Soverign Immunities Act
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reinforced the immunity of foreign gov. in the US cout but not when engaged in commercial activities ex. traffic tickets yes, real estate, no.
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International Organizations Affecting Trade
ex. united nations |
play a role in creating international legal principles and rules that govern the community of nations
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United Nations Purpose
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maintain peace, solve international problems, promote respect for human rights, authorize military action
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General Assembly of UN
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formulates international conventions adopt resolutions which are recommendations on matters within the scope of the UN
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Real Power of UN
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security council, 15 countries, 5 permanent members, each have a veto power, 10 countries that rotate
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5 Permanent Members of UN
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US, Russia, England, France, and China.
power to impose economic sanctions order arms embargo and dispatch troops |
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International Court of Justice
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world court 15 judges, general assembly elects, only for country use. located in Hague Netherlands, to apply international law to settle disputes
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International Court (cont)
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handles two cases a year, US is not part of world court b/c they will only to it case by case basis.
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World Trade Organizations (5)
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EU
NAFTA ASEAN GATT WTO |
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European Union (EU)
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27 nations, promotes a common market so goods/money can be moved without restrictions. (like state to state) own judicial, legislative, and judical branches
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NAFTA
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us, Canada, and Mexico. North America Free Trade Agreement. trade alliance, elimiates tariffs, cheaper products, mexicans have more disposable income.
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ASEAN
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Association of Southeast Asian Nations. Indonesia, Malesyia, Singapore, Thailand, Cambodia, Vietnam, stimulate economic growth, no legal force, free trade, eliminate tariff
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GATT
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dissolved in 1994
96 countries belonged 100 agreements on trade |
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WTO (world trade organization)
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decides disputes among member countries, impose sanctions if dont abide by rules, reduce trade barriers, 141 countries belong, headquarters in Geneva Switzerland
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Globalization
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refers to global businesses supported by gov. deregulate and liberalize the world markets. freer movements of goods across boundries
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Risks of International Commerce (3)
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political
economic transactional |
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Political Risks
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gov. may impose trade quotas. or restrictions on the quantity of goods that can be imported
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Trading w/ Enemy Act
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restricts US trade with Cuba and North Korea
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Patriots Act
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allowed us to freeze assets when another country committed the crime also detain foreigners
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Exporpriation (Cuba, Fidel Castro)
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kicking citizens/ companies out of another country, ability of host nation to modify or cancel an agreement, must have compenstaion (castro didnt )
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Economic Risks
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rates may change or gov. could restrict the ability to fake money out of the country
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Transactional Risks
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parties will use a contract called documents of title. The use of a transit carrier (bank) that will act as a 3rd party to ensure payments are made
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Steps of Transactions
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1. buyer obtains commitment from bank and gives money. bill of lading given
2. once bill of lading is made bank will give reciever the good once money is made |
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Damaged Goods in Transit
Hague Rules |
impose upon an ocean carrier a duty to exercise to do dilligence standard on a seaworthy vessel. limits liability as to the cause and loss, both parties should have insurance
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Chapter 8
Judicial Remedies (2) |
Remedies at law
Remedies in Equity |
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Remedies at Law
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common law, compensatory, punitive, nominal, and liquidated.
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Remedies in Equity
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to do whats right
developed from chancery court can fashion remedies clean hands doctrine |
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Full Price Given Back
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gave the goods
order was specially made |
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Damages of Re-Sale
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difference between contract
priace and re-sale price if there is a difference |
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Buyer Damages
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Cover price v. contract price
Market value v. contract price |
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Buyer Special Damages
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limited to when damages are forseeable. ex: buyer must tell seller it is for a business
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Liquidated Damages
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Damages awarded by agreement
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Limited Partnership
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one or more general partners and one or more limited partners. Generally to raise revenue (as long as no say in the operation of business)
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Limited Partnership creation
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must file a certificate of limited partnership with the state
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Limited Partnership Management
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must be run by general partners w/o limitied partners
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Limited Partnership Termination
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dissolves the same way as general partnership but the death or withdraw of a limited partner the business keeps going
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Limited Liability Partnership (LLP)
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hybrid between a partnership and corporation. used by professionals like lawyers and doctors to avoid personal liability. must be registered as a LCP and each year must files a certificate of registration
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