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LGS 200 Exam 3 Charlye Adams WITH COMPLETE ANSWERS
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LGS 200 Exam 3 Charlye Adams WITH COMPLETE ANSWERS
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EUNICELGS 200 Exam 3 Charlye Adams WITH COMPLETE ANSWERS
Terms in this set (44)
a person who forms and operates a business
entrepeneur these are the people who START business entities, LLC, sole proprietorship,
partnership
individual business owner is the business. SIMPLE AND EASY
sole proprietorship
no separate buisiness return for federal income taxes
UNLIMITED personal liability. Creditors can satisfy a sole proprietor's business debts
through his/her personal assets
disadvantages of a sole proprietorship class example: I start a sole proprietorship. I borrow money from the bank, then I
bring in a partner at a later date. If I default on that loan, I AM the only person
responsible for that loan, the bank will come after MY personal assets
governing documents (EXCLUDING SOLE If the duration of business entity is longer than one year, that contract must be in
PROPRIETORSHIP) writing due to statute of frauds
Essential elements:
-sharing of profits and losses
-joint ownership of business
General partnership
-equal right in management of business
goodwill is NOT an essential element
GENERAL partner has unlimited liability. if the partnership does not have sufficient
partnership (both general and limited)
assets, creditors will go after the general partner
GENERAL: general partners only
general vs. limited partnership LIMITED: at least one general and one limited
general-day to day operations
limited-capital contributions $
pass through taxation
partnership taxation
profits and losses reported on income tax returns of INDIVIDUAL PARTNERS
management rights of partners Need unanimous consent for bringing in new partner
Every partner, and representative of deceased partner, is entitled to inspect and
inspection of books
make copies
care: partner must refrain from gross negligence and knowing violation of the law
loyalty: fiduciary duty requiring partner to account to partnership for "any property,
duty of care & loyalty (EVERY ENTITY)
profit or benefit" in the conduct of its business.
also don't compete with the business
authority of partners each partner is a general agent of the partnership in carrying out business
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