Ch 14 Class Notes Flashcards
3 types of partnerships
1 general
2 limited
3 limited liability
4 main types of business organizations
1 sole proprietorship
2 partnership
3 corporation
4 limited liability company
3 main barriers for starting a business
1 capital
2 personal liability
3 competition
Advantages to sole proprietorship
1 Easy and cheap to start
2 can get insurance to protect against liability
3 keep profits
4 absolute control
Disadvantages sole proprietorship 2?
1 Unlimited liability
2 terminates upon death or discontinuance
When businesses store products together what is the implication?
That they are partners
Partners can both be found liable…
Even if one is innocent
What is the source of law for a sole proprietorship?
Common law
What is the source of law for a partnership
Common law and UPA
Source of law for limited partnership and limited liability partnership?
Statute
Source if law for corporations
Statute (RMBCA)
How does a corporation get incorporated?
Files articles of incorporation with state and state issues
Charter
Meeting minutes
Corporations are expected to conduct regular meetings
Pierce the corporate veil
To pierce corporate veil it must be found that managers
Didn’t run corporation with meetings and books
Used fraud
Makes managers personally liable
Officers
Day to day managers
