Business Organizations

Question 1

TBOC

Answer 1

The Texas Business Organizations Code

Question 2

In Texas, the statute that governs business organizations is called ___________________________________________.

Answer 2

The Texas Business Organizations Code.

Question 3

In Texas, the statute that governs business organizations is called, __________________________________________.

Answer 3

The Texas Business Organizations Code.

Question 4

6 Types of Business Orgnizations

Answer 4

1. Sole Proprietorship
2. General Partnership
3. Limited Partnership
4. Limited Liability Partnership
5. Limited Liability Company
6. Corporation

Question 5

Simplest form of business organization.

Answer 5

Sole Proprietorship

Question 6

The owner is the business. There is no separate legal entity.

Answer 6

Sole Proprietorship

Question 7

Simplest form of business organization. The owner is the business. There is no separate legal entity. It’s easy to form and there is almost no cost.

Answer 7

Sole Proprietorship

Question 8

The ________________________ is legally responsible for the business’s contracts and the torts s/he or any employees commit in the course of employment.

Answer 8

Sole Proprietorship

Question 9

Business that’s easy to transfer or sell; no other approval is necessary. It’s easy to form and there is almost no cost. Simplest form of business organization.

Answer 9

Sole Proprietorship

Question 10

DBA

Answer 10

Doing Business As

Question 11

In Texas a ____________________- is formed by filing an assumed name certificate with the County Clerk’s office.

Answer 11

Doing Business As

Question 12

Where do you file an assumed name certificate for a DBA?

Answer 12

County Clerk’s office

Question 13

Forming a DBA

Answer 13

• Can operate under the name of the sole proprietor, or under a trade name, which is designated as a DBA - doing business as.
• In Texas, a DBA is formed by filing an assumed name certificate with the County Clerk’s office.

Question 14

In Texas, a DBA is formed by filing an ____________________________________ with the County Clerk’s office.

Answer 14

assumed name certificate

Question 15

A SP can operate under the name of the SP, or under a _________________, which is designated as a _______________.

Answer 15

• trade name

- DBA- doing business as

Question 16

__________________________ are voluntary associations of two or more persons. The business must have a profit motive, even if it doesn’t actually make a profit. The agreement to form one may be oral, written, or implied from the contracts of the partners.

Answer 16

General Partnership

Question 17

Voluntary association of two or more persons to form a business that has a profit motive.

Answer 17

General Partnership

Question 18

The agreement to form a partnership may be ___, ________________, or ______________________.

Answer 18

oral,
written,
or implied from the contacts of the partners.

Question 19

A written partnership agreement is called a ______________________ or _____________________.

Answer 19

partnership agreement or

articles of partnership

Question 20

Partners are ___________________ for contracts & debts; they are _________ and __________ for torts.

Answer 20

jointly liable for contracts & debts

jointly & severably liable for torts

Question 21

This type of business has both general and limited partners. General partners invest capital, manage the business, and are personally liable for partnership debts. Limited partners invest capital, but do not participate in management and are not personally liable for partnership debts beyond their capital contribution.

Answer 21

Limited Partnership

Question 22

Has both general and limited partners.

Answer 22

Limited Partnership

Question 23

In an LP, ____________________ invest capital, manage the business, and are personally liable for partnership debts.

Answer 23

general partners

Question 24

In an LP _____________________ invest capital, but do not participate in management and are not personally liable for partnership debts beyond their capital contribution.

Answer 24

limited partners

Question 25

In an LP the ___________________ have unlimited liability for debts of the LP.

Answer 25

general partners

Question 26

In an LP, the __________________ are liable only up to the amount of their original contribution.

Answer 26

limited partners

Question 27

To have a Limited Partnership (LP), the partners must execute and sign a __________________________ that contains the name of the LP, character of the business, address of the place of business, address of the resident agent for service of process, name/address of each partner, amount contributed by each partner, and anything else the partners want to include.

Answer 27

Certificate of Limited Partnership

Question 28

What must a Certificate of Limited Partnership contain?

Answer 28

1. Name of the LP 2. Character of the business 3. Address of the place of business 4. Address of the resident agent for service of process 5. Name/address of each partner 6. Amount contributed by each partner 7. Anything else the partners want to include

Question 29

________________________ is a form of partnership in which all partners are limited partners and there are no general partners.

Answer 29

Limited Liability Partnership

Question 30

An LLP is a form of partnership in which all partners are ______________________ and there are no _______________________.

Answer 30

- limited partners | - general partners

Question 31

Partnership with all limited partners and no general partners.

Answer 31

Limited Liability Partnership

Question 32

LLP

Answer 32

Limited Liability Partnership

Question 33

LLPs enjoy ______________________ tax benefit of other types of partnerships.

Answer 33

"flow-through"

Question 34

What is "flow-through" tax benefit?

Answer 34

no tax is paid at the partnership level and all profits and losses are reported on the individual partners' income tax returns.

Question 35

LLPs must be created formally by filing _______________________ with the Secretary of State.

Answer 35

Articles of Limited Liability Partnership

Question 36

Where are articles of Limited Liability Partnership filed?

Answer 36

Secretary of State

Question 37

Liability in an LLP is limited for all partners to ________________________.

Answer 37

their contributions

Question 38

LLC

Answer 38

Limited Liability Company

Question 39

_____________________ is an unincorporated business entity that combines the most favorable attributes of general partnerships, limited partnerships, and corporations.

Answer 39

Limited Liability Company

Question 40

A ________________may elected to be taxed like a partnerships. And the owners, called members, can manage the business and have limited liability.

Answer 40

Limited Liability Company

Question 41

The owners of a LLC (Limited Liability Company) are called __________________.

Answer 41

members

Question 42

LLC owners called _________________, can enter into an operating agreement that regulates the conduct of the company and governs relationships.

Answer 42

members

Question 43

_________________________ are the dominate form of business organizations.

Answer 43

Corporations.

Question 44

Corporations generate more than __________ of the country's gross business receipts.

Answer 44

85%

Question 45

Corporation owners are called ___________________.

Answer 45

shareholders

Question 46

LLC owners are called __________________-

Answer 46

members.

Question 47

Corporations are __________________- and treated as _________________.

Answer 47

separate legal entities | artificial persons

Question 48

4 Unique Characteristics of Corporations

Answer 48

1. Limited liability of shareholders; 2. Free transferability of shares; 3. Perpetual existence; and 4. Centralized management.

Question 49

A corporation is a _____________corporation in the state in which it is incorporated.

Answer 49

domestic

Question 50

A corporation is _________________corporation in all states and jurisdictions except the state in which it was incorporated.

Answer 50

foreign

Question 51

When deciding which state to incorporate in, _________ are the primary consideration.

Answer 51

tax issues

Question 52

___________________ incorporates the most businesses in this country.

Answer 52

Delaware

Question 53

______________________________ is the basic governing document of the corporation.

Answer 53

Articles of Incorporation

Question 54

Articles of Incorporation must be filed with ___________________.

Answer 54

the Secretary of State of the state of incorporation.

Question 55

_____________ are a detailed set of rules that are adopted by the board of directors after the corporation is incorporated.

Answer 55

Bylaws

Question 56

Bylaws contain _____________ for managing the business and the affairs of the corporation.

Answer 56

provisions

Question 57

BOD

Answer 57

Board of Directors

Question 58

The BOD appoints _______________, who conduct daily business in corporations.

Answer 58

Officers

Question 59

A Texas Corporation is formed by filing a ___________________________________________________.

Answer 59

Certificate of Formation with the SOS.

Question 60

SOS

Answer 60

Secretary of State

Question 61

Texas imposes a _____________________-, called a margin tax on corporations.

Answer 61

privilege tax

Question 62

Texas imposes a privilege tax, called a ____________________________ on corporations.

Answer 62

margin tax

Question 63

Delaware imposes a privilege tax, called a ___________________________, on corporations.

Answer 63

franchise tax

Question 64

Delaware privilege tax = | Texas privilege tax=

Answer 64

``` Delaware = franchise tax Texas = margin tax ```

Question 65

A corporation whose stock is traded on a stock exchange is called a _____________________________.

Answer 65

public corporation

Question 66

Ownership of a corporation is evidenced by ___________________________.

Answer 66

stock certificates