Business Organizations Review – Flashcards
Unlock all answers in this set
Unlock answersquestion
Corporations are treated similarly to what else under the law?
answer
similar to people
question
How are franchises taxed?
answer
@ own rate of business
question
How do we describe a corporation whose stock certificates limit the conditions under which an owner may sell or transfer his stock(ownership) in the corporation?
answer
"closely held"
question
How many owners can there be in a sole proprietorship?
answer
1
question
If someone holds a legally recognized position of trust with another person, what is the legal term describing the person's relationship to the other?
answer
fiduciary
question
In a professional partnership, what is generally required of all the partners?
answer
partnership agreement
question
Least regulated to most heavily regulated
answer
sole-general partnership-limited partnership-LLP- corp.
question
Name 3 different forms of partnerships
answer
-general -limited -limited liability
question
Under the theory of joint and several liability, what do we call the partner who can afford to pay if the other partners are unable to pay damages awarded to a victim?
answer
deep pockets
question
What are the advantages of being a franchisee?
answer
quick start of a business with a proven track record/some control/guidance and security/large scale advertising
question
What are the advantages of being a franchiser?
answer
quicker expansion into markets
question
What are the corporate powers?
answer
sue or be sued/make internal operating procedures in its bylaws/ buy, hold, and sell real & personal property/ make contracts/ borrow & lend money/ participate in a partnership or other entity/ conduct its business inside and outside its state of origination/ elect it's managers
question
What are the disadvantages of being a franchisee?
answer
many upfront costs/ no guarantee of success/ franchiser has ultimate control/ limited to only distributing the franchiser's product
question
What are the disadvantages of being a franchiser?
answer
limited pool of viable entrepeneurs/ share profits/ difficult to suspend incompetent franchisees(could damage parent company's image)
question
What are the fiduciary duties imposed on partners, and what do they entail?
answer
-duty of loyalty -duty of care -duty of good faith and fair dealing
question
What are the four characteristics of corporations?
answer
-continuity of life -centralization of management -limited liability -free transferability interest
question
What are the three forms of assets that a partner may contribute to a partnership?
answer
-cash -service -property
question
What are the three general forms of business organizations?
answer
-sole proprietorship -partnership -corporation
question
What does joint and several liability mean?
answer
creditors and plaintiffs(people with lawsuits against the partnership) can choose to hold a wealthy partner responsible for all damages whether or not he caused the damages
question
What does the term liability mean?
answer
legal responsibility
question
What is a franchise?
answer
business model
question
Who is the franchiser?
answer
develops products and business systems/ grants independent operators the right to distribute its products, techniques, and trademarks/ recieves
question
Who is the franchisee?
answer
independent operators
question
What is like the constitution of a partnership?
answer
partnership agreement
question
What is the biggest tax advantage of partnerships?
answer
only taxed on personal level
question
What is the biggest tax advantage of sole proprietorships?
answer
only taxed on personal level
question
What is the biggest tax disadvantage to corporations?
answer
taxed twice ( corporate and individual level)
question
What is the document called that spells out the purpose of a partnership, how much each partner will contribute, each partner's ownership interest, how profits and losses will be distributed, how partners will be compensated, management responsibilities, how a partnership may be terminated, under what conditions a partner may be forced to sell his interests to the other partners, and other terms of a partnership?
answer
partnership agreement
question
What is the market instrument that the government requires LLPs to have that serves to both compensate the public for when they are injured by an LLP and also shut down habitually negligent LLPs?
answer
liability insurance
question
What is the role that a limited, or silent partner may play in a limited partnership and what role may that partner not perform?
answer
merely investors with financial interest/ have no management rights
question
What must be included in the name of a general partnership?
answer
nothing
question
What must be included in the name of a limited liability partnership?
answer
"limited liability partnership" or "LLP"
question
What must be included in the name of a limited partnership?
answer
"limited liability" or "LP"
question
What percentage of businesses in America are sole proprietorships?
answer
75%
question
What percentage of revenue do sole proprietorships compose out of all businesses?
answer
6%
question
Which supreme court case established the fifth amendment right of corporations to protection from double jeopardy?
answer
Fong Foo V United States
question
Which supreme court case established the rights of corporations to make and enforce contracts just like a natural person?
answer
Dartmouth V Woodward
question
Which supreme court case established the rights of corporations to equal protection of the law under the 14th amendment?
answer
Pembina V Pennsylvania
question
Which supreme court case established the rights of corporations to 1st amendment free speech rights, including political speech rights?
answer
Citizens United V FEC
question
Which supreme court case established the sixth amendment right of corporations to a trial by jury?
answer
Armour Packing V United States
question
Who are the owners of a corporation?
answer
shareholders
question
What do the owners elect to run the corporation?
answer
Board of Directors
question
liability in sole proprietorship
answer
sole proprietor
question
liability in general partnership
answer
everyone
question
liability in limited partnership
answer
general partners
question
liability in limited liability partnership
answer
insurance, no one
question
corporation
answer
no one
question
franchise
answer
depends on type of organization
question
Who hires corporate officers
answer
Board of Directors
question
Who is responsible for the debts and obligations of a partnership?
answer
general partners
question
CEO
answer
executive
question
CFO
answer
financial
question
COO
answer
operations
question
CTO
answer
technology
question
CIO
answer
information
question
What are the two most important things to consider when contemplating which business organization to choose for one's business?
answer
liability and taxes
question
construction company
answer
corporation
question
hair salon
answer
sole
question
dog walker
answer
sole
question
media company
answer
limited liability partnership
question
medical practice
answer
limited liability partnership
question
hospital
answer
corporation
question
building management company
answer
corporation
question
grocery store
answer
corporation
question
plumber
answer
limited partnership
question
landscaper
answer
LLP
question
architect
answer
LP
question
energy company specializing in nuclear energy
answer
corporation
