ppt 5 - Law & Business Associations: Types of Business Enterprises Basics

Proprietorships

Single owner or "Mom & Pop" Shops; selling friendship bracelets on etsy

Partnerships

Co-Owners; you and your buddy open a restaurant

Limited Partnerships

General Partner operates, Limited Partners invest

Limited Liability Companies

Incorporated business entity; most flexible

Limited Liability Partnerships

Another form of incorporated partnership; law firms, accounting firms

Corporations

Businesses with a separate legal status apart from owners; 'people under' the law

franchises

an arrangement in which the owner of a trademark, trade name, or copyright licenses others to use the trademark, trade name, or copyright in the selling of goods or services.

Fiduciary Obligations

DUTY OF LOYALTY AND CARE: Business associates are subject to fiduciary obligations (extremely high standards) with
regard to one another

Duty of Loyalty

Higher standard of behavior -> trustee like
- Duty to act faithfully with regard to one's obligations and duties
- Put interests of business entity ahead of own interests

Duty of Care

- Duty of due care in performing duties
- Requirement to act in good faith
- Counterpart of common law negligence
- Must act in best interests of enterprise