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what are the advantages of a sole propriotor ship (4)
- not charged org fee (EXCEPT FOR DVA CERTIFICATION
- Owner controls all decisions
- owner recieves all of the profit
- no corporate income tax
what are the disadvantages of a sole propriotorship
- Unlimited buisness liabilty for debt
- has to come up with start up money by himself
- authority to make contracts dies with death
- business is subject to disintegration
what are the advantages of a partnership
- can gather capital from two or more partners
- no org fee (other than written partnership written aggreement and DBA certification)
what are the disadvantages of a partnership
- UNlimited personal liability for each partners debt. '
- uncertain duration of business, because business is dissolved by death of partner
what are shareholders, and what do they do?
- they are owners of the company
- and they elect the board of directors
what does the board of directors do?
what do officers do
they manage the day to day ORG
ADVANTAGES OF A CORPartion
- shareholders liabilty is limited to the amount that they invested
- free transfer of corporate shares( easier to expand)
- perpetual life(never dies)
Disadvantage of corporattion
- double taxation ( income tax and shareholders tax)
- ORG FEES
- filling fees
what is a partnership
- 2 or more perople run a business as co owner for profit.
- each partner is a agent of the partnership.
- partners do no recieve workers comp
what are the rules for the company firms name
there is not rewuirement to have both names on the name of the partnerships firm. (ie. bob and bill)
DBA- must be fixed to reflect the name if so.
what is a general partner
publicly involved on the transactions of the business.
known to the public, but do not engage in the activities of the company.
takes part in the business activities but is not known to the public
what does the relationship of a co-owner consist of
- control as co owners
- sharing profit and losses
- co ownership and property
if one partner dies the other will take over
do joint tenants have survivor ship?
do tenants in common have survivorship
partnership does not need to be public
whats a factor that means you are not a partner
fixed payments regardless of losses
does the contribution of property make you a partner?
what are the rules of partnership and propety
- each partner has the right to use certain eqpuipment on the property
- no specific person owns a specific item or equipment in the partnership
- on the death of a partner the partnership property stays with the firm
what is a partnership agreement
it is an agreement that is created based on the concent of all of the partners and has priority over any rules.
whaT ARE The authorities of a partner
- contracts- make contracts to conduct firm business
- sales- selling of firm goods
- purchases- can make purchases for the firm
- loans- they can sign documents on behalf of the firm
- insurance- can handle all insurance affairs
- emplkoyment- can hire people
- can handle claims for and against the firm
- admissions of a partner that are adverse to the interest of the partnership it still counts
what are teh limitations of a partnership
- the partnership agreement
- the 3rd party is required to be suspicous if the partner is acting wierd.
what are prohibited transactions
- cessation of business - a decision that would result in termination of the employee or the buisness
- arbitration- not allowed to submit a dispute arbittration, because it eliminates the other partners right to court
- can not use partnership assests to pay offf personal debts
- confession of judgement- you can give away your right to other partners but other partners have to speak. all must agree
obligations of partners
- loyalty- can not promote a competing firm or make secret profit at the partnerships expense
- obidience- duty to abide by partership rules
- information - must tell all partners about relevent info( you tell one you tell them all)
- acounting- partners has the obligation to keep accurate records
what are the rights of partners
- managment- each partner has equal right to manage
- Inspection of books- can inspect books if requested
- compensation- partners are not compensated for services rendered for the partnership( exceptption- wind up affairs)
- repayment of loans - only capital contribution not interest
what does common law say about a partnersship and creditors
partnership assets be taken 1st b4 the partener can reach a partner personal assets.
what are the liabilties of a partnership
contribution and indemnity- every one equally shares debts and profits. (new partners are not liable for debts before them.)
what does commonlaw say about personal creditors of a partner in a partnership?
they must go after that partners personal assest before they can go over the partners intrest in the partnership
what is disolution and termination
it ends the right of the partners but does not end the partnership
what is the wind up period
a time spent finishing up old business
what are the ways for dissolution
- by act of partners- agree to terminate
- withdraw- if a partner quits (if not specified a partner can quit at any time and when you wuit you agree not to compete)
- dissolution by operation of law- death, bankrupcy, illegality (judges cant practice law)
- Dissoluiton by court of law - insanity, misconduct, inevitable loss(not working), equitable circumstances(falsefinancial statement)
what is a notice of dissolution?
if a partners is going to quit they have to tell all of the partners.
relationship of a 3rd party remains unitl they are informed of the partner leaving
whats the order for the distributopn of assets?
- 1. Debt to Creditors
- 2. repayment of [artner loan
- 3. return of capital to partners
- 4. remaing is prfit
what is a limited partner?
a partner that just invested money
limited liabilty company ?
- best of both worlds
- allows for income to be moved like a partnership, but is peotected like a corporation
where do llc file there papares
in the secretary of state office
what are the people who own a llc called
- and they are paiid seperate for services rendered to the company
what is a llp
- limited liabilty partnership
- is similar to llp
- name must have llp
what are the key benefits of a llp
- no liabilty beyond the capital contribution by each person
- no vicarious liability
- liabilty falls soley on the partner and his action aswell as who he supervises
what is a cooperation
- seperate legal entity
- seperate distinct for the share holders
how are the debts of acoperation handeled
the debts of the cooperation is not the debts of the shareholders
how is a corp formed
certificate of coeration must be filed and approved by the state.
what is a public cooperation
what is a public authority
a semi independent govt . ie housing authority
what is a domestic corp
a corp is that is incorporated "here"
is acorp that is incorpaorated else where
non for profit corp
- is a corp that does not collect profit
- and purpose is charitable
do corps have perpetual life
there are no rewuirements for names of corps
some may use limted
what are non certificate shares?
shares of ownership not on account
ways that the corporate veil can be pireced
- failure to maintain adequete corperation earnings and records
- diversion od corperate funds and assets by shareholders
- formation of corp to avoid org
- formation of cooperation to perptuate fraud
what are some of the portions of the article of cooperation corperate name
principle pffica address
- corperate name
- principle pffica address
- people forming the corp
- # of shares
one whos filing is complete
what is a defacto corp
slightly diferent filling in corp papers
what is judicial dissolution
court ordered dissolution
2 corps delete and become one
one company becomes apart of the other
realtionship between parent comp and subsidiary
waht is aasset sale
big comp buying comps assets
how can you tranfer stock
- by signing the back of the certificate to a person
- signing a stock power form
- stock transfer form
- you need a fancy notary
if you loose a certificate
the comp will not issue new cert
tranfer agent chage 2% of stock for reprodcution
director liabilty ( includes board of directors)
they are protected as long as they are acting in the best intrest of the company
what is a chapter 7 bankru[cy
- luquidation proceeding
- all owes will be discharged
what is a potition
- states all creditors owd
- and they can no longer collect
- a partner can file this
what is chapter 11 bankrupcy?
reorganization- they dont want to go out of businessbut they want to get more time to pay back
what is chaptr 13 bankrupcy
for consumers to have more time to pay back debts
creditaors can no longer try to collect
discharge in bankrupcy
official bankrupcy papers
person who helps the bankruptee
- have collateral if not paid
- in better posiiton
alternative to court
what is confession of judgment
- debter signs to confess to debt,
- partners can not sign
what is a partnership claim
can be filed aginast any partner
compensation of work
you donot get compensation per hour
comp stock gets od high
trust intrest share
two or more companies come to gether for one goal
2 or more people come together to form a non proft
- 2 or more people that come together for a common goal
- ie buying and selling . farmers market.
buisiness format run by anyone
pay day to day expenses
pay advertisement and training
what is the relationship of the franchisee and the franchisor like?
- seen as 2 knowledgable business associates
- main goal of franchisee is to maintain quality control of franchise
- franchisee is usually responsible liable
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