Business Organizations Flashcards
TBOC
The Texas Business Organizations Code
In Texas, the statute that governs business organizations is called ___________________________________________.
The Texas Business Organizations Code.
In Texas, the statute that governs business organizations is called, __________________________________________.
The Texas Business Organizations Code.
6 Types of Business Orgnizations
- Sole Proprietorship
- General Partnership
- Limited Partnership
- Limited Liability Partnership
- Limited Liability Company
- Corporation
Simplest form of business organization.
Sole Proprietorship
The owner is the business. There is no separate legal entity.
Sole Proprietorship
Simplest form of business organization. The owner is the business. There is no separate legal entity. It’s easy to form and there is almost no cost.
Sole Proprietorship
The ________________________ is legally responsible for the business’s contracts and the torts s/he or any employees commit in the course of employment.
Sole Proprietorship
Business that’s easy to transfer or sell; no other approval is necessary. It’s easy to form and there is almost no cost. Simplest form of business organization.
Sole Proprietorship
DBA
Doing Business As
In Texas a ____________________- is formed by filing an assumed name certificate with the County Clerk’s office.
Doing Business As
Where do you file an assumed name certificate for a DBA?
County Clerk’s office
Forming a DBA
- Can operate under the name of the sole proprietor, or under a trade name, which is designated as a DBA - doing business as.
- In Texas, a DBA is formed by filing an assumed name certificate with the County Clerk’s office.
In Texas, a DBA is formed by filing an ____________________________________ with the County Clerk’s office.
assumed name certificate
A SP can operate under the name of the SP, or under a _________________, which is designated as a _______________.
- trade name
- DBA- doing business as
__________________________ are voluntary associations of two or more persons. The business must have a profit motive, even if it doesn’t actually make a profit. The agreement to form one may be oral, written, or implied from the contracts of the partners.
General Partnership
Voluntary association of two or more persons to form a business that has a profit motive.
General Partnership
The agreement to form a partnership may be ___, ________________, or ______________________.
oral,
written,
or implied from the contacts of the partners.
A written partnership agreement is called a ______________________ or _____________________.
partnership agreement or
articles of partnership
Partners are ___________________ for contracts & debts; they are _________ and __________ for torts.
jointly liable for contracts & debts
jointly & severably liable for torts
This type of business has both general and limited partners. General partners invest capital, manage the business, and are personally liable for partnership debts. Limited partners invest capital, but do not participate in management and are not personally liable for partnership debts beyond their capital contribution.
Limited Partnership
Has both general and limited partners.
Limited Partnership
In an LP, ____________________ invest capital, manage the business, and are personally liable for partnership debts.
general partners
In an LP _____________________ invest capital, but do not participate in management and are not personally liable for partnership debts beyond their capital contribution.
limited partners
In an LP the ___________________ have unlimited liability for debts of the LP.
general partners
In an LP, the __________________ are liable only up to the amount of their original contribution.
limited partners
To have a Limited Partnership (LP), the partners must execute and sign a __________________________ that contains the name of the LP, character of the business, address of the place of business, address of the resident agent for service of process, name/address of each partner, amount contributed by each partner, and anything else the partners want to include.
Certificate of Limited Partnership
What must a Certificate of Limited Partnership contain?
- Name of the LP
- Character of the business
- Address of the place of business
- Address of the resident agent for service of process
- Name/address of each partner
- Amount contributed by each partner
- Anything else the partners want to include
________________________ is a form of partnership in which all partners are limited partners and there are no general partners.
Limited Liability Partnership
An LLP is a form of partnership in which all partners are ______________________ and there are no _______________________.
- limited partners
- general partners
Partnership with all limited partners and no general partners.
Limited Liability Partnership
LLP
Limited Liability Partnership
LLPs enjoy ______________________ tax benefit of other types of partnerships.
“flow-through”
What is “flow-through” tax benefit?
no tax is paid at the partnership level and all profits and losses are reported on the individual partners’ income tax returns.
LLPs must be created formally by filing _______________________ with the Secretary of State.
Articles of Limited Liability Partnership
Where are articles of Limited Liability Partnership filed?
Secretary of State
Liability in an LLP is limited for all partners to ________________________.
their contributions
LLC
Limited Liability Company
_____________________ is an unincorporated business entity that combines the most favorable attributes of general partnerships, limited partnerships, and corporations.
Limited Liability Company
A ________________may elected to be taxed like a partnerships. And the owners, called members, can manage the business and have limited liability.
Limited Liability Company
The owners of a LLC (Limited Liability Company) are called __________________.
members
LLC owners called _________________, can enter into an operating agreement that regulates the conduct of the company and governs relationships.
members
_________________________ are the dominate form of business organizations.
Corporations.
Corporations generate more than __________ of the country’s gross business receipts.
85%
Corporation owners are called ___________________.
shareholders
LLC owners are called __________________-
members.
Corporations are __________________- and treated as _________________.
separate legal entities
artificial persons
4 Unique Characteristics of Corporations
- Limited liability of shareholders;
- Free transferability of shares;
- Perpetual existence; and
- Centralized management.
A corporation is a _____________corporation in the state in which it is incorporated.
domestic
A corporation is _________________corporation in all states and jurisdictions except the state in which it was incorporated.
foreign
When deciding which state to incorporate in, _________ are the primary consideration.
tax issues
___________________ incorporates the most businesses in this country.
Delaware
______________________________ is the basic governing document of the corporation.
Articles of Incorporation
Articles of Incorporation must be filed with ___________________.
the Secretary of State of the state of incorporation.
_____________ are a detailed set of rules that are adopted by the board of directors after the corporation is incorporated.
Bylaws
Bylaws contain _____________ for managing the business and the affairs of the corporation.
provisions
BOD
Board of Directors
The BOD appoints _______________, who conduct daily business in corporations.
Officers
A Texas Corporation is formed by filing a ___________________________________________________.
Certificate of Formation with the SOS.
SOS
Secretary of State
Texas imposes a _____________________-, called a margin tax on corporations.
privilege tax
Texas imposes a privilege tax, called a ____________________________ on corporations.
margin tax
Delaware imposes a privilege tax, called a ___________________________, on corporations.
franchise tax
Delaware privilege tax =
Texas privilege tax=
Delaware = franchise tax Texas = margin tax
A corporation whose stock is traded on a stock exchange is called a _____________________________.
public corporation
Ownership of a corporation is evidenced by ___________________________.
stock certificates
