Business Law: Business Structures Flashcards
What are the owners of a limited liability company called?
Members
What are the controlling partner(s) of a general partnership or limited partnership called?
General partners
What are the limited partners of a limited partnership called?
Limited partners
If an LLC member dies, what is the result to the LLC?
Absent an agreement to the contrary, if a member of an LLC dies, the LLC is dissolved unless the other members consent to continue
How are profits and losses shared in a partnership?
Unless there is an agreement to the contrary, LOSSES in a partnership will be shared in the same manner as PROFITS are shared.
In the agreement does not discuss profits, then the profits will be shared equally regardless of investment of money or time.
Can an LLC be formed with limited liability for all members?
Yes. Unlike a limited partnership.
What is the document that is filed with the state for an LLC?
Articles of organization
What situation might give rise to the presumption that a partnership exists?
Generally, an agreement to share profits raises a presumption of partnership. However, no such presumption arises if the profits represent wages, rent, or repayment of a loan.
What information must be contained in a corporation’s articles of incorporation?
The articles must contain the name of the corporation, the name of its registered agent, the name of its incorporators and stock provisions (specifically including the amount of shares the corporation is authorized to issue and which stock has voting power). Thus, the names of all incorporators and a provision for the issuance of voting stock must by included. The names of the officers are not required.
What rights do shareholders have?
Stockholders have the right to elect directors and vote on fundamental changes. Fundamental changes include dissolutions, amending the articles of incorporation, mergers, consolidations and compulsory share exchanges and sale of substantially all of the corporation’s assets.
What does a hold harmless agreement in a partnership give rights to?
A hold harmless agreement allows a partner to recover from other partners any amounts he is required to pay to creditors.A hold harmless agreement does not prevent creditors from holding an outgoing partner liable.
