LGS 2 - 200

Question 1

diffrent forms of buisnesses

Answer 1

• sole proprietorship
• limited partership (LP)
• limited liability partnership (LLP)
• limited liability company (LLC)
• a corporation

Question 2

requiemnts any form must meet

Answer 2

1. Buisnnes name registration
2. occupational licensing
3. state tax registation
4. health/enviormental permits
5. zoning & buildong codes
6. import/export regulations

Question 3

sole propietorship

deffinition

Answer 3

-is the simpilest form of buissnes organization in which the owner is the buisnnes

Question 4

sole propietorship

what falls onto the owner?

Answer 4

• they report the buisnees income on thier personal tax return
• is leggaly respon. for all debt
• also repon. for obligations

Question 5

sole propietorship

the advantages

Answer 5

1. they get all of the profit
2. statring as a S.P is the easiest & cheapest form for starting a buisness
3. fewer legal fomalitlies are requiered

Question 6

sole propietorship

the taxes - what the owner pays (SP)

Answer 6

• ONLY pays personal income taxes on the bis. profits
• allowed to est. retiremnet accounts that are tax exempt, UNTIL a withdrawl

Question 7

sole propietorship

flexability

Answer 7

• sp’s are more felxible than a partetship or corp
• they are free to make decision for the buis. such as :
• 1. what kind of buisnnes to presue
• 2. whom to hire
• 3. when to vacation
• also dont have to get approval from others to sell all/part of the buis. - this is REQUIERED in parterships and corps.

Question 8

sole propietorship disadvans.

personal assets at risk

1/3

Answer 8

• if owner is in debt creditors may go after their personal assest to satisfy the debt repayment
• again S.P.s have UNLIMITED personal liability

Question 9

sole propietorship disadvans.

lack of continuity

2/3

Answer 9

• a S.Pship has this AFTER death of proprietor
• when owner dies so does th buisness

Question 10

sole propietorship disadvans.

limitied ability to raise capital

3/3

Answer 10

• the P. is limited to their own personal funds & any loans they obtain
• • banks (lenders) may be uwilling to give a loan
• especally to : sps, start ups, cuz the Sp risk unlimited personal libality & might not be able to pay back loan
• small buis. admini. SAB loans focus on women, low income people, minoritys, BUT the owner must have invested in the buiss to be eligable for 1

Question 11

Partenrships

partnership

Answer 11

• one arises form an agreement, expressed or implied, btwn 2/+ persons to carry on a buisness for a profit
• persons - does include corps.
• intent to associate - is key element of a p.
• partners :
• 1. are co-owners of the buisness
• 2. have joint control over its operation
• 3. have the righ to share in its profit

Question 12

Partnership

applicable law

Answer 12

• Ps are goved by common law concepts (specifically agency law) & statutory law
• the union partnership act - goves the operation of partnerships in the ABSCENCE of express agrement

Question 13

Partnership applicable law

agency relationships

Answer 13

• a partnership realtionship is SIMILAR to an agency relationship
• each partner is deemed an agent, of other partners of the pship
• concepts of agency law apply -agents are charged with the knowledge & respon. for acts done within partership realtionship
• partners - like agents -bound to fiduciary ties = must act in best interest of one another

Question 14

Corporations

Answer 14

gov law- artificial being only exist in law and isnt tangable or visibel
legal entity - a L.E. created and recognizes by STATE law