Sole proprietorship correct answers person doing business for themselves;
- Limited alternatives for raising capital
- Owner is liable for debts
- No double taxation
Partnership correct answers an association of two or more persons to carry on business for profit; either general or limited...
Mgmt 200 - Quiz 4 || WITH CORRECT SOLUTIONS.
Sole proprietorship correct answers person doing business for themself;
- Limited alternatives for raising capital
- Owner is liable for debts
- No double taxation
Partnership correct answers an association of two or more persons to carry on business for
profit; either general or limited
General partners correct answers - share control over the business's operations and profit
- can be created orally, in writing, or inferred by the conduct of parties
Fiduciary duty correct answers a relationship that requires partners to act in good faith for the
benefit of the partnership
Dissolution correct answers legally ending the partnership
Winding up correct answers - the process of settling the partnership's affairs, including
collecting revenues and paying debts
- Creditors paid first
Limited partnership correct answers business organization made up of two or more persons
who have agreed to carry on a business for profit; either general or limited
Corporation correct answers an artificial person, or legal entity, created under state law
Certificate of incorporation correct answers state issued certificate a corporation receives
after reviewing the corporation's application for completeness
Bylaws correct answers rules that regulate and govern the key structure of the corporation
Legal entity correct answers rights and responsibilities separate from the owners
Quorum correct answers usually more than half of the total shares
Proxy correct answers written authorization to cast their vote so they don't have to attend the
meeting
Shareholders correct answers own the corporation
Board of directors correct answers governing committee of a corporation
Principal correct answers on behalf of the corporation it sets corporate policy and decides
corporate business
Business judgment rule correct answers makes directors and managers immune from liability
when problems result from honest mistakes in judgment
, Fiduciary duty of loyalty correct answers requires directors place the interests of the
corporation before their own interests
Managers correct answers run the business
Close corporation correct answers - a limited number of shareholders, usually 30 - 50
- Shares may not be sold openly
Professional corporations correct answers formed by licensed professionals
Benefit corporation correct answers a corporation that voluntarily meets high standards of
purpose, accountability, and transparency
disadvantage to corporations correct answers Double taxation of profits
advantage to corporations correct answers Limited liability
limited liability company correct answers a business organization that is treated like a
corporation for liability purposes but like a partnership for federal tax purposes
Articles of organization correct answers similar to a corporation's articles of incorporation
Operating agreement correct answers provides rules about the operation of the company and
the relationships of the members
Three types of franchises correct answers - Product distributorships (car dealership)
- Trademark or trade-name licensing (coca-cola bottler)
- Business format franchising (McDonald's)
Franchise agreement correct answers sets forth the rights and obligations of the franchisor
and franchisee
Factors to consider when structuring your business correct answers -Taxes
- Liability
- Fiduciary
- Present assets
- Future assets
Respondeat superior correct answers the idea that the employer is usually liable for the
negligent conduct of employees
All that is necessary to form a partnership correct answers - Two or more persons who agree
to be co-owners of a business to make a profit
- In absence of a written agreement, things are 50/50
Partnership by estoppel correct answers partnership doesn't exist but somebody has
represented themselves as a partner and third party has relied on that and suffered a harm
Uniform partnership act correct answers - laws that fill in the gaps not addressed in oral
agreements for partnerships
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