Lecture 7 Flashcards
Individual Proprietorship
* ________ and least ___________ to establish
* Proprietor _____/operates all transactions of
business in his/her ____
* Maximum degree of _______ from
governmental regulation
easiest, expensive, owns, name, freedom
Individual Proprietorship
Requirements
* _____________
* ____ registration
* Business _________
Insurance, tax, licensure
Individual Proprietorship Examples:
Independent photographers, small
landscaping companies, freelance writers, or personal trainers
General Partnership
* Agreement between ____ or ____ individuals
* Generally, ____ a legal entity. In some cases, Partnerships can be a ____ entity:
two, more, not, legal
General Partnership
* Are __-______ of a business.
* Share ____________ and liability for each other’s _________ within the scope of the
business.
* Typically operate under a ‘_________ ________ __ ___________’ which details the terms of
the partnership.
co-owners, responsibility, actions, Written Articles of Partnership
General Partnership
* Are considered ____-________, which means they are not ___________ of the
partnership and (no income tax withholding, FICA, or employee benefits).
* Are personally liable for business ______, which means personal ________ may be at risk to cover business _________.
self-employed, employees, debt, assets, liabilities
General Partnership
* Can own __________ in the name of the partnership
* Can have __________
* Can ____ and be ______ in the name of the partnership
property, employees, sue, sued
General Partnership Advantages
* Concentration of _____ (increased bonding relations)
* Pooling of _________ and facilities
* Consolidation of _____
* Partners share in management ___________
[* Profit and loss are shared in _________ to amount of __________]
assets, equipment, talents, responsibilities, proportion, ownership
General Partnership Common Risks
* Partners are __________ liable for all debts of the partnership – unlimited liability
* An injured partner may ______ against other partners
* If a partner _________, he/she is still responsible for all __________ until the
point of his/her withdrawal (Not responsible for new obligations after official
withdrawal)
individually, claim, withdraws, obligations
General Partnership
Reasons for Dissolution of Partnership
* _____________
* Duration in the Articles of the Partnership Agreement
* ___________ by a Partner
* Insanity of a Partner
* Court of Equity Decree
* Mutual Consent
* ________ of a Partner
Bankruptcy, withdrawal, death
General Partnership Examples:
- Spouses and family members who run a business together
- Law firms
- Architectural firms
Limited Partnership, LLP
* Partner invests _____ but does not share in _________ or control of business
* Also called “______” partner
* ______ owner (shares in profit and loss)
* Liable only to _______ of contributed _______
cash, operation, silent, part, extent, capital
Limited Partnership, LLP
* Unlike general partnership, limited partnership is not __________ liable for
the debts
* A limited partnership is often used to ____________ the investment of capital
by offering investors _________ liability.
personally, encourage, limited
Limited Partnership
* LLPs are often formed by ____________ _______, such as doctors,
accountants, or law offices.
* For example, in Real Estate, general and limited partners come together to
work on a short-term construction project. The limited partners invest money, and the general partners manage the venture.
professional offices
Corporation, Inc.
* _______ entity under the name of a _________
legal, corporation
Corporation, Inc.
Corporation can:
* Do _________ per its charter
* Own ______ and _________ property
* Enter into _________
* Sue and be sued
* Incur debts
* Act as an ___________
business, real, personal, contracts, individual,
Corporation, Inc. Classified as…
* Public or _______
* _______ non-profit
* Foreign or ________
private, profit, domestic
Corporation
Advantages
* __________ life
* _________ liability of owners (stockholders)
* Easily aggregate large capital
* Employees can be _________ (profit sharing)
* Fringes and retirement _________ more readily available
perpetual, limited, owners, benefits
Joint Venture
* A __________ purposed ________
* Partners may be: proprietors, partnerships or corporations
* A separate______ ________
special, partnership, legal entity
Joint Venture: Why JV?
* _____ resources
* Pool _____________
* Obtain special _____ and spread _____
pool, management, skills, risk
