Proprietorship correct answers Oldest/Simplest Form of Business
-Unincorporated Business owned by One Person or Husband and Wife
-Default Setting
Advantages to Proprietorship correct answers -Easy to maintain
-One owner
-No Registration with the Government
-Profits are Exclusive to Owner
(...
Bus 250 || with Accurate Answers 100%.
Proprietorship correct answers Oldest/Simplest Form of Business
-Unincorporated Business owned by One Person or Husband and Wife
-Default Setting
Advantages to Proprietorship correct answers -Easy to maintain
-One owner
-No Registration with the Government
-Profits are Exclusive to Owner
(Must withhold Self-Employment Taxes)
Disadvantages to Proprietorship correct answers -Personally Liable(Debts and Liabilities)
-Limited Financing Options
-Difficult to attract long-term Employees
-No Stock
-Span of Control is Limited
Partnerships correct answers Association of Two or more Co-Owners who carry on a business
for Profit
General Partnership correct answers -Co-Owner has equal shares unless written in statement
-Each is a General Partner unless otherwise agreed upon
Advantages to General Partnership correct answers -Easy to Form(No filing with State)
-Share Financial Commitment
-Non-Tax Paying Entity(Taxed as an Income Tax to Partners)
-Easy to Expand
-The more you make, the lower per-unit cost
Disadvantages to General Partnership correct answers -Liability: Each partner is responsible for
partnership's debt regardless of whether he caused them
-Funding: Can't Sell Shares
-Capital comes out of Partner's Pockets
-Management:Every Partner is a Boss
-Transferability: Can alienate the value of the partnership interest but not the partnership itself
Example of Transferable Interest correct answers -Partner is Sued for a Debt Owed
-Judgement for Monetary Award is Entered
-Creditor may seek payment of debt from Partner's transferable interest
-Court Orders "Charging Order", which means Partner must pay debt or foreclose his rights to
Partnership
Example of Transferable Interest: LIABILITY correct answers Every partner is liable for any act
of furthering partnership, as is signing a contract.
, "Partners agree that office needs major rehabbing. Adam takes care of remodeling. All partners
are liable for Adam's purchases. If Adams purchases aren't paid, the creditors may sue
partnership by suing all partners. If successful, creditors may seek a charging order against
partnership's assets
Partnership Liability: Joint and Several correct answers Injured party has the right to recover full
amount of damages from one, some or all of those who caused his harm. May not recover more
than 100% of damages
Fiduciary correct answers Person, Institution(including Corporations), in whom one has place the
utmost trust and confidence to manage and protect his property, money, or both.
Fiduciary Relationship correct answers Imposes the Highest standard or care Recognized by Law
Ex. of Fiduciary Relationship correct answers Guardian-Ward
-Guardian: One who has legal authority and duty to care for personal property interests of
another person, the Ward.
Ex. Child awarded monetary damages for injuries arising form an accident. By law, a minor
cannot manage own business affairs. Money is then entrusted to parent as child's
guardians(Fiduciaries)
Management-Fiduciary Relationship correct answers Law Partner must turn over fees earned as
director of another company, earned as a Businessman, because of his partnership. But, he can
keep income from books, music, artwork; investment profits..
Partnership Liability Example correct answers Alice forms general partnership with Crust.
Crusty will mine for gold and share profits equally with Alice. Alice buys truck to use in
partnership. While driving Alice hits 3 kids. Partnership is liable for tors committed in course of
partnership business. Plaintiff(s) may sue: Crusty Partnership with Alice... If judgment obtained
against partnerhsip,... all partnership assets must be liquidated first, then each partner.
Partner is not liable for another partner's criminal misconduct unless...
authorized or participated in the misconduct.
Termination of a Partnership correct answers Dissociation
-End of a partnership occurs when a partner quits, by vote, or death.
Fork in the Road
-Partners can buy out Partner and continue business; or "Wind Up"-Terminate partnership and
liquidate assets
Winding Up
-All partnership debts paid
-Remains distributed to partners
Termination
-Follows "winding up"
Limited Partnership correct answers Differs from General Partnership: State Law must authorize
formation
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