Business Organizations and Real Estate Legal Issues

Flashcards summarizing key vocabulary and concepts related to business organizations, real estate, antitrust, and securities law.

Sole Proprietorship

A business owned and run by one person, where there is no legal distinction between the owner and the business entity.

Positive Attributes of Sole Proprietorship

Easy to form, manage, and relatively inexpensive to begin and maintain.

Negative Attributes of Sole Proprietorship

Personal liability of owners for business obligations and limited capital raising ability.

Partnership

A contractual relationship for a common business venture that may be verbal or written, formed by natural persons or business entities.

General Partnership

Comprised of two or more partners with joint and several personal liability.

Positive Attributes of General Partnership

Relatively easy and inexpensive to create, enhanced ability to raise capital, more diverse skill and knowledge level.

Negative Attributes of General Partnership

Joint and several personal liability of all general partners and more potential for disputes.

Limited Partnership

Comprised of two groups of partners with at least one partner in each group; offers limited liability for limited partners but can be difficult to manage.

Corporation

Considered "persons" in legal terms; can enter into contracts, own property, and be a party to lawsuits.

Pros of Corporations

Can raise significant capital, tax advantages may be favorable, no liability for corporate obligations

Cons of Corporations

More difficult to manage, more expensive to create, more complicated form of business structure.

Limited Liability Company (LLC)

Offers flexible operating rules, tax and liability protection, and is easy to form but may vary by state.

Real Property

Land and anything permanently affixed to it.

Personal Property

Any movable or intangible thing that is not real property.

Fee Simple

Absolute ownership of property, allowing it to be sold or willed away.

Life Estate

Ownership of property for the duration of someone's life.

Pur Autre Vie

A life estate based on the lifetime of someone other than the person holding the life estate.

Tenancy for Years

A leasehold interest for a fixed period of time.

Easement

The legal right to use another person's property for a specific purpose.

Grant Deed

A type of title for real estate.

Community Property

All property acquired after marriage.

Antitrust Laws

Laws designed to enhance competition in the marketplace by preventing unreasonable restraints on trade.

Federal Trade Commission (FTC)

The federal government agency that enforces antitrust law.

Sherman Act

Federal law passed in 1890 which attempts to prohibit "anti-monopoly" between businesses.

Securities Acts of 1933 and 1934

Federal laws regulating the initial issuance and resale of securities.

Securities Exchange Commission (SEC)

Federal regulator of the securities market.

Insider Trading

The illegal practice of trading on the stock exchange to one's own advantage through having access to confidential information.