29 - entities (not mine)

Question 1

What are the generic entities?

Answer 1

1. Sole proprietorship - one owner
2. Partnership - multiple owners
3. Corporation - complex and more requirements for owner
4. Hybrids (limited partnership, LLC)

Question 2

How is a sole proprietorship
1. Created
2. Operate
3. Terminated

Answer 2

1. Literally by a dude going “I have a company now lol”
2. The owner receives all the profits but also bares all the loss
   -Profits are taxed
   -Unlimited liability
3. The guy does and there’s no succession plan in place

Question 3

How is a partnership created?

Answer 3

Two dudes say “hey let’s make a business” and hopefully a contract

Question 4

How does a partnership operate?

Answer 4

At least one person has unlimited liability.
1.Partners have the same duties as agents
2.The rights of the partners:
-participate in management
-inspect records
-contribution have precedence
-withdraw advances
-withdraw of profits at the end of the year (share dependent on agreement)
-liabilities

Question 5

What are the different kinds of partnership?

Answer 5

1. General - everyone has unlimited liability
2. Silent - partner that does not participate in the business, but maybe funds the business and participates in the profits
3. Secret - active in the business but is not a face of the business
4. Limited liability - there is a general partner (unlimited liability) and a file has been made to be a corporation. Limited liability = limited partnership

Question 6

Is the entity separate (limited) or are the owners personally liable (unlimited):
1. Sole proprietorship
2. Partnership
3. Corporation

Answer 6

1. You are the entity, everything is fair game and you have unlimited liability
2. Depends on where the money is (indemnification)
3. Stockholders have limited liability to the business and not personal liability

Question 7

Compensating someone for loss

Answer 7

Indemnification