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BULE 302 - Final Exam > Business Orgs > Flashcards

Business Orgs Flashcards

1
Q

What is the simplest form of business?

A

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2
Q

What type of business organization offers the limited liability of a corporation, but the tax advantage of a partnership?

A

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3
Q

What entity is an arrangement in which the owner of a trademark, trade name or copyright licenses another to use that IP?

A

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4
Q

What type of entity would I create if I want to open my pink cupcake bakery?

A

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5
Q

What type of entity would I create if I want to sell chai tea?

A

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6
Q

What type of entity would I create if I want to open a funky handmade clothing store with my best friend?

A

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7
Q

What type of entity would I create if I want to start a law firm with my law school study group?

A

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8
Q

What type of entity would I create if I want to start an accounting firm 10 SOM classmates?

A

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9
Q

What type of entity would I create if I want to sell Starbucks/Caribou/Saxby’s coffee?

A

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10
Q

What type of entity would I create if I want to own a very large ski resort?

A

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11
Q

Cat of the day: Vicky

A
  • Vicky is the Chief Executive Cat
  • Julie thinks she was a feral cat – barn cat or a dumpster cat
  • Daughter of Vicky is May, who died from kidney disease
  • Vicky did not like May
  • May would be a sole proprietor
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12
Q

Burton’s and Snowbird Ice Cream

A
  • Became Baskin & Robbins
  • Irvine Robbins
    • Cofounder of Baskin & Robbins
    • Died at 90 in 2008
    • Julie saw obituary and got excited (weirdo)
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13
Q

Who was Irvine Robbins?

A
  • Irvine Robbins opened first shop (Snowbird Ice Cream) in 1945 in Glendale, CA
  • Robbins was son of a dairyman
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14
Q

Why did Irvine Robbins want to start a business?

A
  • When he worked for his father, he finished a days work happy
  • Wanted to do the same when he started his own business
  • Julie thinks that this is important
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15
Q

How did Irvine Robbins start his own business?

A
  • In 1945, there were no pure ice cream stores
  • Cashed in his insurance policy for $6000 that his father gave him for his Bar Mitzvah
  • Wanted to start a partnership with Baskin, his brother-in-law
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16
Q

Did Baskin and Robbins start out together?

A
  • No, Mr. Robbin’s father recommended that they not partner up initially, but instead start out separately
  • Burt Baskin was married to Shirley, Irvine Robbin’s sister
  • Baskin opened Burton’s Ice Cream shop instead
  • By 1948, they started working together
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17
Q

What was Baskin-Robbins innovation?

A

• Their niche was to create unusual flavors

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18
Q

How did Baskin-Robbins business expand?

A
  • Flipped a coin and decided whose name would go first, Baskin won
  • They were so busy, that they did not have time to manage all of their stores
  • They decided to sell their stores to their managers
  • Were doing franchising before…
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19
Q

At what rate did B-R franchises expand?

A
  • Factory in Burbank, made hundreds of new flavors a year, but only 8 or 9 made it to the stores
  • At the end of 1949, they had 43 stores
  • By 1960, 100
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20
Q

When did B-R sell their company, and what happened to the founders?

A
  • When they had 500 stores, in 1967, they sold the company to United Fruit for $12 million
  • Baskin died six months after selling company
  • Mr. Robbins still worked for them for 11 years after sale of company
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21
Q

What are some unique facts about Irv Robbins?

A
  • Backyard pool was shaped like an ice cream cone
  • Became a lecturer on entrepreneurship at UCLA and …
  • Ate a bowl of cereal with a scoop of banana ice cream for breakfast
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22
Q

Major factors in creating a business

A
  • Name
  • Location
  • Type or kind of business
  • Register entity with the state
  • Tax info
  • Mission statement/vision
  • Business plan
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23
Q

Potential elements of a business plan

A
  • Pricing and promotion strategy
  • Marketing
  • Company and product description
  • Employees
  • Startup costs/financing
  • Expertise or knowledge needed
  • SWOT analysis
  • Competitive advantage analysis
  • Slogan or titling
  • Accounting
  • Taxes
  • Liability
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24
Q

What type of business entity?

A

• What issue should I think about? • BIG issue??? o Lawyer vs. accountant

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25
Q

Importance of a business name

A
  • Name is really important
  • Think BIG
  • Think about tomorrow
  • If you are successful, your choice will be with you for a long time
26
Q

Benefits of choosing a business name

A
  • Name may influence the growth of your business
  • Business name automatically contains a marketing element
  • Your business name should benefit your marketing
  • Name can create different visual images
27
Q

Dangers of choosing a business name

A
  • A personal name could affect franchising
  • Name can reveal origins of your business
  • Don’t pigeonhole your business
  • Descriptive terms can limit flexibility
28
Q

Strategies for choosing a business name

A
  • The “sound and spell test”
    • How do you spell that?
    • Need to be able to spell by only hearing it
  • Think about domain names, and buy them
  • Suck sites: “www.cocacolasucks.com”
29
Q

Smak Parlour small business

A
30
Q

Important points about partnerships

A
  • Business partnerships are like marriages
  • Trust and work ethic are vital ingredients
  • Any partner that doesn’t pull their weight, will harm the partnership
  • Strategies
    • Define roles clearly
    • Develop a written partnership agreement
    • Define exit strategies
31
Q

Blue Eden small business

A
  • Small shop in NJ
  • Expanded to airport kiosk
  • Makes soaps from her grandmothers recipe
  • Chose an LLC to avoid personal financial exposure
  • Not interested in franchising because of reliance on local artists
  • www.blueedenstoneharbor.com
32
Q

Entity choices

A
  • …
33
Q

Sole proprietorship

A
  • Funding
  • What happens when the owner dies?
    • The business entity ends
    • An heir can take over the business as a new entity
34
Q

LLC

A
  • Hybrid
  • Operating agreement
35
Q

What are the owners of an LLC called?

A
  • Members
36
Q

Lost Dog Café

A
  • …
  • What would the original owners want to include in the franchise contract?
  • …
37
Q

Private Franchises

A
  • …
38
Q

Examples of franchises

A
  • Distributorship
  • …
  • …
39
Q

Franchises

A
  • Franchisor
  • Franchisee
40
Q

Laws governing franchising

A
  • More than one area
41
Q

The franchise contract

A
  • Important!
  • …
42
Q

Partnerships

A
  • an association of two or more persons to carry on as co-owners a business for profit
  • Created by agreements
  • Governed by common law and statutory law
  • See text UPA page 404
43
Q

Partnership taxes

A
  • Partnership has no tax L
  • Partner’s profit is taxed as individual income to the partner
44
Q

Major Forms of Businesses Compared

A
  • See chart on page 465
45
Q

Corporations – why Delaware?

A
  • …
46
Q

Corporations

A
  • statutory requirements – creature of statute
    • What law?
  • a legal entity separate and distinct from its owners – can have perpetual existence.
  • The shareholder-owners elect directors, who set policy and hire officers to run the day-to-day business of the corporation.
  • Corp can have hundreds, thousands or even millions of shareholders
  • Impact of death of shareholder
47
Q

Corporations – the good and the bad

A
  • Shareholders normally are not personally liable for the debts of the corporation.
  • Taxes
    • corporation taxed on net profits;
    • shareholders taxed on disbursed dividends.
48
Q

Corporations – the good and the bad

A
49
Q

Classification of corporations

A
  • Domestic
  • Foreign
  • Alien
50
Q

Certificate of Authority

A

Certificate of Authority

51
Q

The corporation is a legal entity distinct from its owners.
Liability?

A

The corporation is a legal entity distinct from its owners.
Liability?

52
Q

What laws govern corporate formation?

A

What laws govern corporate formation?

53
Q

How long can the corporation exist?

A

How long can the corporation exist?

54
Q

Corporate personnel

A
  • The shareholders own the corporation.
  • They elect a board of directors to govern the corporation.
  • The board of directors hires corporate officers and other employees to run the daily business of the firm.
55
Q

Corporate Taxation

A
  • Corporations taxed on net profits
  • Shareholders taxed on dividends
  • Known as double-taxation
56
Q

Are shareholders of a corporation ever personally liable?

A
  • Yes, shareholder(s) may be personally liable by “piercing the corporate veil”
  • Very rare legal remedy
57
Q

quorum

A
  • the number of members of a decision making body that must be present before business can be transacted
58
Q

proxy

A
  • …
59
Q

Stock certificate

A
  • certificate issued by corp evidencing the ownership of a specified number of shares
60
Q

Virginia State Corporation Commission

A
  • Office of the Clerk webpage:
    • Forms
      • Entity search
      • Entity formation
      • Check name distinguishability
      • Annual reports
  • www.scc.virginia.gov
61
Q

Why is Delaware important to corporations?

A
62
Q

Who was Lilly Pulitzer?

A
  • Opened an orange juice stand
  • Needed an apron that would hide stains
  • Instead, made a sleeveless dress with a citrus print
  • Created a women’s fashion empire
  • www.lillypulitzer.com

BULE 302 - Final Exam (6 decks)

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