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51 Cards in this Set

  • Front
  • Back
Sole Proprietorship

Creation
Decision of individual proprietor.
Sole Proprietorship

Organization & Regulation
May need license and fictitious business name statement.
Sole Proprietorship

Management and Control
Sole proprietor makes all management decisions
Sole Proprietorship

Profits & Losses
Sole proprietor retains all profits; may use losses to offset income
Sole Proprietorship

Liability
Sole proprietor personally liable for all debts and obligations
Sole Proprietorship

Duration
Termination upon death of sole proprietor
Sole Proprietorship

Transfer of Interest
Sale possible, but new sole proprietorship has to be created.
Sole Proprietorship

Taxation
Payment at appropriate individual tax bracket
Partnership

Creation
Oral or written agreement of 2 or more parties
Partnership

Organization & Regulation
No requisites, but written partnership agreement is prudent
Partnership

Management & Control
Partners free to agree on structure; equal rights absent contrary agreement.
Partnership

Profits & Losses
Partners agree on allocations; equal shares regardless of capital contribution absent contrary agreement.
Partnership

Liability
All partners jointly and severally personally liable.
Partnership

Duration
Termination upon stated term, mutual agreement or death or withdrawal of a partner under UPA; under RUPA many events result in a buyout of partner's interest rather than termination.
Partnership

Transfers of Interest
Interest in profits transeferable, but transferee does not become a partner, absent agreement of remaining partners.
Partnership

Taxation
Each partner declares pro rata share on tax return whether distributed or not; entity files information tax returns.
Limited Partnership

Creation
Secretary of State's acceptance of LP certificate
Limited Partnership

Organization & Regulation
Filing fees; must file and maintain LP certificate; written LP agreement is usual.
Limited Partnership

Managment & Control
General partners have full responsibility; limited partners precluded from management.
Limited Partnership

Profits & Losses
Agreement controls allocations which generally accord with contributions.
Limited Partnership

Liability
Unlimited for general partners; limited partners' liability limited to amount contributed or invested.
Limited Partnership

Duration
Termination upon stated term, mutual agreement, or death or withdrawal of general partner.
Limited Partnership

Transfers of Interest
New partners admitted per agreement to terms; absent agreement, admission by unanimous consent.
Limited Partnership

Taxation
Each partner declares pro rata share on tax return; whether distributed or not; entity files information tax return.
Limited Liability Partnership

Creation
Secretary of state's acceptance of LLP Application
Limited Liability Company

Creation
Secretary of state's acceptance of Articles of Organization
Business Corporation

Creation
Secretary of state's acceptance of Articles of Incorporation
Limited Liability Partnership

Organization & Regulation
Filing fees; name requirements; annual renewal is required in a few states.
Limited Liability Company

Organization & Regulation
Filing fees; operationg agreement; name requirements; annual reports usually required.
Business Corporation

Organization & Regulation
Filing fees; annual reports; name requirements; articles and bylaws govern.
Limited Liability Partnership

Management & Control
Partners may decide among themselves.
Limited Liability Partnership

Profits & Losses
Agreement controls allocations, which generally accord with contribution.
Limited Liability Partnership

Liability
In full shield states, partners have no liability; in partial shield states partners retain personal liability for contractual obligations.
Limited Liability Partnership

Duration
In a few states term is one year; in most states term is perpetual.
Limited Liability Partnership

Transfer of Interest
Interest in partner's profits assignable; unanimous consent needed for admission of new partner in absence of other agreement.
Limited Liability Partnership

Taxation
Each partner declares pro rate share on tax return, whether distributed or not; entity files information tax return.
Limited Liability Company

Management & Control
Either members or appointed managers.
Limited Liability Company

Profits & Losses
Agreement control allocation, which generally accord with contributions.
Limited Liability Company

Liability
Limited to member's contribution; no personal liability.
Limited Liability Company

Duration
Usually perpetual; limited to 30 years in a few states
Limited Liability Company

Transfers of Interest
Admission of new members requires unanimous consent, unless operating agreement provides otherwise.
Limited Liability Company

Taxation
Each member declares pro rata share on tax return, whether distributed or not; entity files information tax return.
Business Corporation

Management & Control
Board of Directors elected by shareholders
Articles of dissolution
Final document filed with state effecting termination of an entity
Notice of Intent To Dissolve
Document filed with state indicating corporation's intent to dissolve.
Voluntary dissolution
Dissolution initiated by the corportion's directors or shareholders.
Revocation of Dissolution
Almost all sttes allow corps to revoke the decision to dissolve by filing articles of revocation of dissolution.
Under MBCA what is the rule for dissolution?
Only one document needs to be filed to effect dissolution.
Involuntary Dissolution
Dissolution against the will of a corp., initiated by state, shareholders, or creditors (also called judicial dissolution)
Administrative dissolution
A dissolution initiated for technical or administrative defaults, such as failing to file reports or pay taxes.
Reinstatement
Process of reviving a corporation dissolved for administrative purposes.