09/01/2022 Business Structures

Question 1

For a Corporation to disolve, in general: BAI

Answer 1

Board of directors votes upon a resolution for dissolution

All shareholders must be notified of the resolution

It can be approved by a majority of a quorum

Question 2

Extraordinary transactions between corporations involve three steps BSD

Answer 2

Board of directors of each corporation meets and decides on the action

Shareholders vote, and unless the article or bylaws of the corporation provide otherwise, the recommended action must be approved by majority vote of the shareholders.

Dissenting shareholders have appraisal rights, meaning that they may demand to be paid the value of their shares immediately prior to the transaction.

Question 3

organization formed after 1996 cannot be classified as a partnership ITR

Answer 3

Insurance company
Tax-exempt organization
Real estate investment trust

Question 4

IRS wil recognize partners (family or not) only if this requirments are met: TAA TAS

Answer 4

If capital is a material income-producing factor
- They acquired their capital in bonafide transaction
- Actually own the partnership interest
- Actually control interest

If capital is NOT a material income-producing factor
- They join together in good faith
-Agree that contributions entitle them to a share in profits
-Some capital or service provided by each partner

Question 5

Dividends are declared by:

Answer 5

Directors

Question 6

Section 204 of the Uniform Partnership Act states: (a) Property is partnership property if acquired in the name of:

Answer 6

(1) the partnership
(2) one or more partners with an indication in the instrument transferring title to the property of the person’s capacity as a partner or of the existence of a partnership but without an indication of the name of the partnership.

Question 7

Section 204 of the Uniform Partnership Act states: (b) Property is presumed to be partnership property if

Answer 7

if purchased with partnership assets, even if not acquired in the name of the partnership.

Question 8

Section 204 of the Uniform Partnership Act states: (c) Property acquired in the name of one or more of the partners, without

Answer 8

without an indication in the instrument transferring title to the property of the person’s capacity as a partner or of the existence of a partnership and without use of partnership assets, is presumed to be separate property, even if used for partnership purposes.

Question 9

The following businesses formed after 1996 are taxed as corporations AAAAAACC

Answer 9

A business formed under a federal or state law that refers to it as a corporation, body corporate, or body.
A business formed under a state law that refers to it as a joint-stock company or joint-stock association.
An insurance company.
A business wholly owned by a state or local government.
A business specifically required to be taxed as a corporation by the Internal Revenue Code (for example, certain publicly traded partnerships).
Any other business that elects to be taxed as a corporation (for example, a limited liability company (LLC)) by filing Form 8832, Entity Classification Election.
Certain banks.
Certain foreign businesses.

Question 10

A few types of businesses generally cannot be LLCs. These include: BI

Answer 10

Banks
Insurance companies

Question 11

The rights of partners include the right to MSEP

Answer 11

Management,
Share in profits and losses,
Examine partnership documents and
Partnership property.

Question 12

General partners (as opposed to limited partners) have
U

Answer 12

Unlimited liability to its creditors. This means that general partners are liable for all contracts and torts of the partnership, not only those due to personal negligence.

Question 13

limited partnership, profits and losses are divided based

Answer 13

on the partners’ capital contributions.

Question 14

Limited partners’ losses and liabilities are limited

Answer 14

to their capital contributions.

Question 15

Who has priority for distribution on assets when a Limited partnership is dissolved?

Answer 15

General and limited partners share in the priority for distribution of assets

Question 16

Under the Uniform Limited Partnership Act (2001) a limited partnership is EP

Answer 16

Entity distinct from its partners.
Perpetual duration

Question 17

The Model Business Corporation Act permits the authorization of stocks with VR

Answer 17

Varying degrees of dividend rights & voting rights
Rights to assets on dissolution

Question 18

Under the Model Business Corporation Act - The articles of incorporation must authorize:

Answer 18

(1) one or more classes or series of shares that together have unlimited voting rights, and
(2) one or more classes or series of shares (which may be the same class or classes as those with voting rights) that together are entitled to receive the net assets of the corporation upon dissolution.

The articles of incorporation may authorize one or more classes or series of shares that have special, conditional, or limited voting rights, or no right to vote.