Business Entity: Formation

Question 1

Business Entity
Formation
Sole Proprietorships

Answer 1

Sole Proprietorships

• no formal filing
• do need tax ID

Question 2

Business Entity
Formation
General Partnerships

Answer 2

General Partnerships

• governed by Revised Uniform Partnership Act
• RUPA is a form contract that supplies a contact among partners
• by agreement may vary RUPA provisions
• written agreement not required
• may file with state, but not required

Question 3

Business Entity
Formation
LP’s, LLP’s, LLLP’s, LLC’s

Answer 3

LP’s, LLP’s, LLLP’s, LLC’s

• must file with state
• governed by Revised Uniform Limited Partnership Act (LLC’s have their own version)

Question 4

Business Entity
Formation
Corporation

Answer 4

• Revised Model Business Corporation Act
• Delaware Corporate Code
• must file Articles of Incorporation with state including:
  
  • corporate name
  • # of authorized shares
  • address of office and registered agent
  • names and addresses of incorporators
    Process
• file
• hold organizational meeting
• draft and adopt bylaws
• obtain certificates of authority to do business in other states

Question 5

Business Entity
Formation
Promoters and their Contracts

Answer 5

Promoters and their Contracts

• person who forms corporation
• owe fiduciary duty to: corporation, other promoters, contemplative investors
• forbidden from profiting from pre-incorporation contracts
  
  • unless full disclosure to board and get approval
  • full disclosure to shareholders and their approval
• promoters are liable on pre-incorporation contracts unless contract indicates only corporation
  
  • promoter remains liable even if corporation adopts the contract
• corporation liable if adopts expressly or impliedly
• once adoption, corporation can enforce