Term
| Writing/Certificate Requirement |
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Definition
| Corporations, LLC's, and limited partnerships |
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Term
| Business Organizations-Limited Liability |
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Definition
1) Allows for a person to invest in a business without placing their personal wealth at risk.
2)Liability of the organization falls on the shareholders |
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Term
| General Partnerships-Partner's rights and duties |
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Definition
-Does not have limited liability
-A partnership is an association of 2+ people to carry on business as co-owners
-Each partner shares equally in profits
-A majority vote controls business decisions |
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Term
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Definition
-An implied agreement
-A written agreement
-An oral agreement |
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Term
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Definition
-Bankruptcy of a partner
-Withdrawal of a partner
-Death of a partner
-Dissolution of partnership per terms of contract |
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Term
| Limited partnerships-Characteristics |
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Definition
-Business organization that has at least 1 general partner and other investors (limited partners) who have limited liability
-General partners and limited partners have limited liability for the debts and torts of the business |
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Term
| Piercing the corporate veil |
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Definition
| If court pierces Corporate Veil, shareholders have unlimited personal liability for corporate debts |
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Term
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Definition
-LLC's are treated like corporation for liability purposes
-LLC's are treated like a partnership for tax purposes
-LLC different from general/limited partnership in that LLC is properly formed, all members of LLC can limited their personal liability to 3rd parties |
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Term
| How corporations are created |
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Definition
-Articles of incorporation must be filed in writing with the appropriate officer of the state
-Board of Directors elected by shareholders |
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Term
| Franchises-Offering circular/franchise agreement |
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Definition
-Offering "circular franchise disclosure document" requires franchises to give prospective franchise buyers the following info
-Financial statement of franchisor
-Background/experience of key executives
-Names/ addresses, phone numbers of other franchises
-List of responsibilities of franchiser and franchisee once deal is made |
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Term
| Key elements of franchise agreement |
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Definition
-use of franchise manual
-franchise fee and royalty payments |
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