Ch 14 Class Notes Flashcards Preview

Legal Business 1 > Ch 14 Class Notes > Flashcards

Flashcards in Ch 14 Class Notes Deck (19)
0

4 main types of business organizations

1 sole proprietorship
2 partnership
3 corporation
4 limited liability company

1

3 types of partnerships

1 general

2 limited

3 limited liability

2

3 main barriers for starting a business

1 capital

2 personal liability

3 competition

3

Advantages to sole proprietorship

1 Easy and cheap to start
2 can get insurance to protect against liability
3 keep profits
4 absolute control

4

Disadvantages sole proprietorship 2?

1 Unlimited liability

2 terminates upon death or discontinuance

5

When businesses store products together what is the implication?

That they are partners

6

Partners can both be found liable...

Even if one is innocent

7

What is the source of law for a sole proprietorship?

Common law

8

What is the source of law for a partnership

Common law and UPA

9

Source of law for limited partnership and limited liability partnership?

Statute

10

Source if law for corporations

Statute (RMBCA)

11

How does a corporation get incorporated?

Files articles of incorporation with state and state issues
Charter

12

Meeting minutes

Corporations are expected to conduct regular meetings

13

Pierce the corporate veil

To pierce corporate veil it must be found that managers
Didn't run corporation with meetings and books

Used fraud

Makes managers personally liable

14

Officers

Day to day managers

15

Board of directors

Strategic managers

16

Shareholders

Owners of corporation

17

4 attributes of forming a corporation

1 capital requirements
2 limited liability
3 transferability of ownership
4 taxation

18

4 ways owners can have unlimited liability for corporate debt under piercing the corporate veil?

1 fail to observe corporate formalities
2 fraud (use corporate funds personally)
3 undercapitalization
4 purchase of "watered" stock