Ownership as a Business

Question 1

Sole Proprietorships

Answer 1

is a business that consists of one person (or married couple that functions legally as one person)

A sole proprietorship operates as an extension of its owner. Sole proprietorships can’t own property as a business. Instead, any property is held by the business’s owner

Liability
The owner of sole proprietorship is personally liable for the profits, debts, and obligations of the business. Consequently, the owner’s personal assets are at risk in the event of business failure or debt. Sole proprietorships are kind of like a starter business legal structure. They don’t offer any protection or tax benefits, but they’re also really easy to set up and don’t require much paperwork beyond basic bookkeeping

Sole proprietorships can operate under the name of the ownre or another name, just so long as it is properly registered with the state.

Question 2

Partnerships

Answer 2

Business that has co-ownership
Two + owners enter into a for profit enterprise
share risk and reward of business
Own the business as partnership
Partnership ownership in property is separate from partner’s individual property
RUPA givis limited liability protections to general partners in limited liability partnerships

Question 3

Uniform Partnership act

Answer 3

partnerships are regulated by the Uniform partnership act
law was created to gefulate how partnerships may be created, function, and be dissolved. The Revised Uniform Partnership Act (RUPA) defines partnerships as an entity between partners and partner assets, instead of an aggregate of those things. The Arizona Uniform Partnership Act allows partnerships to hold property in the name of the partnership

Question 4

How can property be held in partnership

Answer 4

Tenants in Partnership
equal and undivided interest in the property
purchased and owned by the partnership as separate entity

As Individual Partners
creates tenancy in common or joint tenancy based or owners forwishen
only convey your share of the property with approval of all partnership members
in this setup, the property is held by the partners themselves, not by the partnership entity

Question 5

General Partnerships

Answer 5

Each member (general partner) = responsibility for the financial liabilities/obligations of business
Involved in day to day operations
If there are liabilities general partners could be forced to pay pers

Question 6

Limited partnerships

Answer 6

have at least one general partner and one limited partner. Limited partners are limited in terms of their degree of control, participation, and liability. Basically, limited partners are investors

Unlike general partners, they are only liable to the extent of their investment. That means that while they could lose the money they put into the business, they won’t lose any more than that.

a limited partnership can survive the death of departure of either a general or limited partner. This is because of contingency plans set out in the partnership documents.

Question 7

Corporations

Answer 7

Legal entity (can be public, private, for profit or nonprofit)
Created accordance with state law (matter of law)
It can be a person company or a group of people (who are considered a single entity under the law)
Corporation is separate from stockholders
Ownership in severalty
Stockholders aren’t responsible for the corporation’s debts

Question 8

What is C Corp

Answer 8

Any size
multinational in its composition
required to have annual shareholder meetings and publish annul reports
can issue different classes of stocks
some stockholders might have voting rights and some wont
Double taxation

Question 9

similarities between LLC and LLP

Answer 9

Own property/operate other kinds of business
Both combine a form of partnership and corporation
Regulated at state level, have laws outlying how to form this partnerships and the kind of business can form LLC or LLP

Question 10

LLC

Answer 10

set up with one or more persons
it’s unincorporated association
owners are called members
unlimited members
pass through entities
protects personal lability from business debts
can be held liable if another member does something illigal

Question 11

LLC in AZ

Answer 11

Gov by LLC Act
to create LLC business has to file Articles of Organization with Arizona Corporation Commission with the LLCs name, address, name addresses of the members or managers
LLC are governed by a document called operating agreement

Question 12

LLP

Answer 12

All partners have limited liability there is no general partner
Partners can be involved in management but are still shielded from liability
partners aren’t responsible for other partners mistakes
pass through taxation

Question 13

What is S Corps

Answer 13

passess its income or losses through to the shareholders
and this gets reported on individual tax returns
corporation is not required to pay separate taxes
limited to 100 shareholders or fewer and but me US citizens or legal residents

Question 14

LLPs in AZ

Answer 14

To form LLP in AZ file a combined Certificate of Limited Partnership and Statement of Qualification with the Secretary of State

Question 15

Can a trustor of living srust name themselves the trustee and or beneficiary to control or enjoy the trust’s assets while they’re still alive

Answer 15

Yes, if they do, they’ll need to designate a backup trustee and beneficiary for when they are no longer able to fulfill that role, either due to incapacitation or death

Question 16

Advantages of living trust

Answer 16

Avoiding probate
having process in place in case trustor becomes incapacitated

Question 17

Trust

Answer 17

is a legal entity where control of some
asset or property is transferred by a grantor (trustor) to a third party (trustee) to be held for the benefit of another (beneficiary).

Question 18

Living trust (Inter vivos trust)

Answer 18

Trust established when a trustor is still alive

Question 19

Testamentary trust

Answer 19

created by a testament, or will

it is set up while the trustor is alive
it springs into being upon their death
trustor will never play the role of trustee or beneficiary because it takes effect once he is dead
must go to probate

Question 20

Land Trusts

Answer 20

is a trust in which land is purchased to be held for a long period of time for the benefit of a named party

A trustor transfers title of a property to a trustee, and names themself the beneficiary. The beneficiary advises the trustee in the management of the property. This relationship is outlined in a trust agreement or deed.

Question 21

why do people use land trust

Answer 21

Avoiding probate
shielding a property from liens or judgments against the trustor
preventing the partition of the land
avoiding marital co-interest
buying land anonymously

Question 22

Conservation Land Trusts

Answer 22

these are piece’s of land purchased by individuals or conservation groups to keep them from being developed. They can be for natural preserves, habitat for endangered species, land reserved for recreation, or other ecologically focused uses

Question 23

Community Land Trust

Answer 23

is a parcel of land bought by a nonprofit with the goal of creating affordable housing. Usually, the land itself is owned by the trust, and then individual lots are exclusively leased long-term to owners who build housing on them

The goal is perpetually affordable housing

Question 24

Irrevocable trusts

Answer 24

are irrevocable (once irrevocable, cant touch it, it’s no longer yours, it’s the trustee’s and then the beneficiary’s
not subject to estate taxes

Question 25

Revocalbe trusts

Answer 25

can be changes by the trustor at any time

all revocable trusts become irrevocable trusts on the trustor’s death. Both kinds of trusts keep properties from going into probate