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20 Cards in this Set
- Front
- Back
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Busines structures
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sole proprietorship
partnership general partnership limited partnership limited liability partnership corporation |
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sole propietorship
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basic
single person owns and operated as soon as interacts with public, is created cannot enter contract or file tax return |
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general partnership
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two or more individuals join together
name registered if other than persons name law assumes general unless registered otherwise law assumers run together unless agreements states otherwise not independent partners jointly and severally liable simple inexpensive easy to run profit/loss shared equally each partner has equal power and responsibility |
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joint and several liability
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joint
credit may sue or collect from all partners for a partnership debt several creditor may sue or collect from one or some of the partners for a partnership debt if the other partnrs are unable to pay |
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Ernst and Young Inc. v. Falconi
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Falconi and Klein were law partners. Falconi helped his clientshide assets from creditors so that they could get these assetsback after bankruptcy and avoid paying their debts. (This isillegal by the way) The Trustee in Bankruptcy found out about this and got ajudgment against Falconi for fraud. He then sought to enforcethis judgement against Mr. Klein (who had nothing to do with thisscheme). The Judge found that Falconi did this work in the scope of hisactivities as a lawyer (in a partnership) and therefore all partnerswere jointly and severally liable. In other words, it was a bad dayto be Mr. Klein.
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limited partnership
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one or more general partners and one or more limited partners
limited partners provide firm iwth money/property, not service, in exachange of profit limited partners dont manage, liability limited |
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fiduciary
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act in good faith
put clients first never mislead clients |
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limited liability partnership
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new way to address some of the key risks of general partnerships
available only to lawyers, notaries, and cpas two or more people enter into a written partnership agreement designating it, and stating the act governs limited liability partner not liable for professional negligence of other partners firm must include LLP in name |
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partnership agreements
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covers
financial matters compensation busienss matters management membership dissolution |
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corporation
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distinc legal entity
enjoys rights and obligations of individual private or public has incorporators, the creators and shareholders, owners directors who make decisions officers who are responsible for day to day operations |
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R. v. Bata Industries
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A storage site for chemicals had been neglected to the point thatover 200 containers of chemicals had become corroded andexposed to the environment. One of the directors (who was alsothe president) visited the facility twice per year and anotherdirector visited the site monthly. Both directors had personalknowledge of the problem but failed to take steps to remedy thesituation. Both directors were found personally responsible (along with thecompany and they were assessed fines in their personalcapacity. Directors will have some responsibility for ensuring policies arecomplied with, not just written.
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winding up
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voluntary dissolution governed by statute. or a company can end because it goes bankrupt
must maintain corporate records for fixed period of time |
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day to day issues
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condcting business
officers, managers, supervisors, employees, sole shareholder, director tax implications more complex tax structure profits once tax paid, extra money |
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shareholder agreement
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Contract that governs relationship betweenshareholders or between shareholders andcorporation, or governs how the corporationconducts business
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private vs public corporations
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public has open shares
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opression remedy
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when larger shareholder is engaging in conduct that may beenfit them at the expense of the smaller shareholder
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agent
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person with authority to act on anothers behalf
relationships are contractual can be used as form of business organization must obey, confidential, professional, loyal, accountability |
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joint ventures
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temporary relationshipbetween two or more people or businesses that come together to complete a project
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franchieses
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right to operate business using name, products, methods, and ads
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linceses
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contract that confers right from one party to another in accordance iwth the terms of the license
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