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Business Law Exam 4
Chapter 41
14
Law
Undergraduate 2
05/01/2011

Additional Law Flashcards

 


 

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Term
Sole Proprietorship
Definition

one individual owns and operates the business. Common in retail stores, service business and agriculture.

Advantages: no organizational fees. Sole decision making power. Only taxed as personal income.

Disadvantages: unlimited personal liability. contracts and businesses are subject to termination at death of owner.

Term
Partnership
Definition

Pooling of capital resources and professional talent of 2 or more individuals (often law firms, medical assoc., engineering)

Advantages: pool resources and no formal organizational structure

Disadvantages: unlimited personal liability. Uncertainty of duration of business b/c partnership dissolves at death of partner.

Term
Corporation
Definition

Artificial being created by government grants. (treated as non-natural person)

Advantages: attractive to investors due to limited liability of shareholders. Only risk is limited amount of capital investment in business. 

Disadvantages: double taxation (corporate and personal)

Term
Limited Liability Partnership
Definition
shield innovent partners from personal liability beyond their investment in the firm.
Term
Limited Liability Company
Definition
wide range of small manufacturing, retail, service business. Remedies unlimited personal liability problem
Term
Joint Ventures
Definition

Relationship in which two or more persons combine their labor or property for a single undertaking and share profits and losses equally. Similar to a partnership except for a pursuit of a single transaction. All those in venture are accountable for negligence. 

(had start and end date)

Term
Franchise
Definition

a method of doing business. NOT a form of organization.

 

Franchisor grants the franchisee the right to engage in particular activity - using franchise owned intellectual property

Term

Franchise owned intellectual property

 

LIST

Definition

Patents - inventions or process

Copyrights - intellectual expression

Trademarks - mark that identifies a product. 

Trade secret - formula, device, or compilation of info. Used in business that provides advantages over competitors who do not have same information.

Term
Franchise Agreement
Definition
Sets forth rights of franchise to use trademarks etc of franchisor.
Term
Trade Dress
Definition
Products total image including its overall packaging look
Term
Trade Name
Definition
Name under which a business is carried on and if fictitious must be registered.
Term

Types of Franchise

 

LIST

Definition

1. Manufacturing or processing franchise

2. Service franchise

3. Distribution Franchise

Term
Disclosure
Definition

Includes: business experience of franchise - franchisor has to notify the franchisee of any thing from the past within 10 days of purchase. 

ex: bankruptcy, actual/average sales, grounds for termination

Term
Vicarious Liability Claims
Definition
If negligence of the franchisee causes a 3rd party harm, franchisor is not liable b/c of independent contractor status. Franchisor cannot exercise control over employment related matters.
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