Sole Proprietorships
This is the simplest and easiest form of business organization to create.
What is a sole proprietorship?
A partnership is defined as this type of association of two or more persons.
What is an association to carry on a business for profit?
The written document outlining partner rights, duties, profits, and management is called this.
What is a partnership agreement?
This type of business combines the limited liability of corporations with the tax advantages of partnerships.
What is a Limited Liability Company (LLC)?
This business arrangement allows a person to sell goods or services using another company’s trademark or business system.
What is a franchise?
In this business form, the owner and the business are legally indistinguishable.
What is a sole proprietorship?
Under partnership law, partners are considered this in relation to one another when conducting business.
What are agents of each other?
This process occurs when a partner leaves the partnership but the business continues.
What is dissociation?
Owners of an LLC are called this.
What are members?
The person who purchases the franchise is called this.
What is the franchisee?
This major disadvantage means business creditors can go after the owner’s house, car, and personal bank accounts.
What is unlimited personal liability?
When no written agreement exists, partnerships are governed by this law.
What is the Uniform Partnership Act (UPA)?
This occurs when the partnership decides to terminate the business and wind up operations.
What is dissolution?
To form an LLC, this document must be filed with the Secretary of State.
What are Articles of Organization?
The Federal Trade Commission rule requiring disclosures to potential franchise buyers is called this.
What is the Franchise Rule?
This IRS form is used by sole proprietors to report business income on their personal tax return.
What is Schedule C?
This fiduciary duty requires partners to avoid self-dealing and not compete with the partnership.
What is the duty of loyalty?
During dissolution, this process involves collecting assets, paying debts, and distributing remaining assets.
What is winding up?
This legal theory allows courts to ignore the LLC structure and hold members personally liable if they misuse the company.
What is piercing the corporate veil (alter ego theory)?
This type of partnership includes at least one general partner and one or more limited partners.
What is a limited partnership (LP)?
This event automatically ends a sole proprietorship unless arrangements are made.
What is the death of the owner?
Under the UPA, partners may be held responsible for the entire partnership debt under this liability rule.
What is joint and several liability?
Partners must avoid this conduct, which includes misusing partnership property or stealing partnership opportunities.
What is breaching fiduciary duties?
An LLC can choose this tax treatment to avoid corporate double taxation.
What is pass-through taxation?
In this partnership structure, partners are protected from liability for another partner’s malpractice.
What is a Limited Liability Partnership (LLP)?