Forms of business ownerships Flashcards
what are the 3 types of business ownerships
sole proprietorship, partnership and corporation
is the proprietor of a sole proprietorship liable for 100% of the debts ?
yes
can the sole proprietor sell their business?
no
when are partnerships generally used?
when there is a tax advantage or when the law requires you to do so
what is solidary liability ?
each partner can be held liable for 100% of the partnerships debt
in a sole proprietorship when does the business terminates?
when the owner dies or when they decide to stop operating
whats the most common form of parntership
general partnership
whats a partnership agreement
a private contract signed by all of the partners which specify the roles, contributions, functions and share of profits of each partner. This contract should also provide for a mechanism to buy/sell/transfer the interests of a partner
aside from a general partnership, whats another type of partnership?
limited partnership (contained general and ls special partners)
in a limited partnership, how liable is a special partner?
they do not have personal liability for the debts of the partnership
Are general partners liable for business debts?
yes
what are the 3 persons of notes
directors, officers and shareholders
do shareholders manage the company
no
can shareholders be a legal persons and a human beings
yes
shareholders vote to elect who?
directors
who are the mandataries of the company
directors and officers
can directors be shareholders and officers of the company
yes
Can officers be legal persons
no they must be human beings
do shareholders have unlimited liability
no they have limited liability
Class A shares are
common shares
Class B shares are
Preferred shares
What are the 3 rights of common shares
the right to vote (elect directors), the right to receive dividends (surplus of profits) if declared by the company, and the right to receive residual property (if the company is voluntarily liquidated)