Brainscape's Knowledge GenomeTM


Top Flashcards (Certified)
All Flashcards

Legal Business 1 > Ch 14 > Flashcards

Ch 14 Flashcards

(63 cards)

Start Studying
0
Q

Publicly held

A

Have hundreds or thousands of owners

Ex. Business whose stock is traded on public exchange

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
1
Q

Closely held

A

Organizations owned by few people

Ex. Family owned and operated businesses

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

5 factors to consider when selecting business organizations form

A 
1 creation cost
2 continuity (stability)
3 managerial control of decisions
4 owner's personal liability
5 taxation/distribution of earnings
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Creation

2 Examples of issues with creation

A

Legal steps necessary to form particular business organization

Ex. Issues, cost and length of time to create

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Continuity

A

Durability, how can the organization continue to operate

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Dissolution

A

Any change in ownership that changes legal existence of

Organization

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Managerial control, important issue

A

Have mechanisms in place to solve disputes about who

Has control over decisions in the company

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Sole proprietorship: creation

A

No formal documentation, business licenses only

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Sole proprietorship: continuity

A

As long as proprietor desires, but no transfer to others

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Sole proprietorship: control

A

Total control by proprietor

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Sole proprietorship: liability

A

Personal obligation for all debts and laibilities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Sole proprietorship: taxation

A

All business income subject to personal taxation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Partnership: creation

A

Automatic based on business conduct

Modified by agreement

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Partnership: continuity

A

Dissolved when 1 partner withdraws

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Partnership: control

A

Each partner has equal voice, though can be modified

By agreement

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Partnership: liability

A

Personal obligations for all debts and liabilities

Joint and several liability

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Partnerships: taxation

A

All business income subject to personal taxation divided

equally

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Corporation: creation

A

Incorporators apply for state charter with articles of

Incorporation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Corporation: continuity

A

Perpetual, as long as it can conduct business

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Corporation: control

A

Managed by officers, appointed by directors, who are

Elected by shareholders

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Corporation: liability

A

Shareholder obligations limited to investment, absent

Other commitments

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Corporation: taxation

A

Corporate income taxed

Shareholders taxed on income distributed

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Limited partnership: Creation

A

Partnership agreement and certificate filed in public

Office where business is conducted

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Limited partnership: continuity

A

Dissolved when general partner withdraws

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Limited partnership: control
General partners have total control
25
Limited partnership: liability
Personal obligation for general partners Limited partners obligated for investment
26
Limited partnership: taxation
All business income subject to personal taxation
27
S Corporation: Creation
Incorporators apply for state charter with articles of | incorporation
28
S Corporation: continuity
Perpetual, so long ad number of shareholder limited
29
S Corporations: control
Managed by officers, appointed by directors, who are | Elected by shareholders
30
S Corporation: liability
Shareholder obligations limited to investment, absent | Other commitments
31
S Corporation: taxation
All business income subject to personal taxation
32
Limited liability company or partnership: Creation
Organizers file articles of organization with state official
33
Limited liability company or partnership: continuity
Dissolved when member withdraws, but may be continued | By those remaining
34
Limited liability company or partnership: control
Equal management by members unless manager designated
35
Limited liability company or partnership: liability
Members are agents, but liable only for investment
36
Limited liability company or partnership: taxation
All business income subject to personal taxation
37
Articles of partnership
Formal agreement drafted among parties to form partnership
38
State assumed name statute
If name of partnership is other than name of partners, | The partners must give notice of their actual identity
39
Partnership: Buy and sell agreement
Agreement provides for amount and manner of compensation | for deceased or withdrawing owner of partnership
40
Domestic corporation
Name for Corporation within state it is incorporated in
41
Foreign corporation
Name for corporation when it is in all other states that | It's not incorporated in
42
Alien corporation
Corporation created under the authority of a foreign country
43
Charter of incorporation AKA Articles of incorporation
Application to set up corporation
44
Incorporators
Individuals who founded the corporation
45
Corporations outside of state they are incorporated in must be...
Licensed in any outside state it operates in
46
Board of directors, 2 functions? How are they elected?
Set goals for corporation and appoint officers Elected by shareholders
47
Why are a lot of corporations incorporated in Delaware? 2 reasons
1 Respected judiciary deciding issues related to general Corporation law 2 no income tax
48
Proxy
Agent appointed by shareholder for purpose of voting the | shares
49
Derivative suit
Lawsuit brought on when board of directors (majority Shareholders) act illegally oppressing the rights of minority Shareholders
50
The alter ego theory: Piercing the corporate veil
Situations where corporate organization is being misused | And shareholders face unlimited liability
51
Methods for avoiding double taxation 3 things
1 Deduct reasonable salaries, interest from debt and meals 2 Not pay dividends (but IRS then makes company pay tax) 3 Elect to file subchapter s of internal revenue code Which eliminates corporate tax
52
4 advantages of being organized as a corporation
1 transferring ownership 2 limited shareholder liability 3 control held by those of minority investment 4 perpetual existence
53
4 Disadvantages of forming corporation
1 high costs of formation (license, franchise fees, procedural) 2 must be qualified in all states where business is conducted 3 subject to more gov. Regulation 4 corporate income subject to double taxes
54
6 Advantages of partnerships
1 easily formed 2 low costs 3 not a tax paying entity 4 each partner has equal voice in management 5 may operate in more than 1 state without liscences 6 less gov regulation
55
4 disadvantages of partnerships
1 only limited # of people can be partners 2 partnership dissolved when any partner leaves 3 unlimited liability 4 partners taxed on share of profits whether distributed Or not
56
Limited partner
Partner not personally responsible for debts of business | Organization
57
General partners of limited partnership
Managers of limited partnership Personally liable for organization's debts
58
Articles of Organization
Filings to create a limited liability company
59
Organizers
Creators of limited liability company
60
Members
Owners of LLC's
61
LLC'S: managerial control
Unanimous consent by all members or managers is | Necessary to make a binding decision
62
What has the Dodd Frank Act given Shareholder's the right to do?
1 non binding periodic shareholder votes to whether Executives are overpaid 2 shareholders can include own board of director candidates In their proxy

Legal Business 1 (25 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions