Business Law - Chapter 16

Vocker

Sole Proprietorship

business owned and run by one person

General Partnership

2 or more co-owners; share assets & liabilities

joint liability

Liability shared by 2 or more people

tort liability

how can general partnership be formed

agreement, proof of shared profits

general partner

plays an active role in management, known to public

secret partner

same as general but not publicly known

silent partner

is not active and not publicly known but simply provides money

All partners have equal vote. True/False?

True: majority wins

Partnership duties

loyalty, obedience and care

loyalty

partner looks out for the partnership before self

obedience

partners must follow the rules about the partnership

care

partner must work to the best of their ability

dissociation

partnership breaks by act of partners, by law or by court order because of issue

dissociation

partner leaves the partnership

limited partnership (LP)

similar to general partnership but with differences

Management of a silent partnership (limited partner) rests with the…

general partner who bears unlimited liability for the company's debt

limited liability partnership (LLP)

partnership where each partner is NOT liable for acts of other partners

joint venture

business enterprise where 2 or more combine to do a task

domestic corporation

corporation in the state it is incorporated in

foreign corporation

corporation in other states it operates

expropriation

in outside countries; gov. can take priv. business for public purpose

corporation

entity with legal authority to act as single person, separate from owners

share

single unit of ownership of a corporation

shareholder

an individual who owns shares of a corporation; has 1 vote per share owned

corporation advantages

they can obtain large amount of capital through the sale of shares

corporation disadvantages

they are taxed twice; on the corp.'s profits and one the shareholder's profits

S corporation

corporation that doesn't pay income tax, shareholders pay tax on their income

limited liability company (LLC)

(combo of best fts of partner & corp.): entity with legal authority to act as single person, distinct from owners