R6 - Business Law: Part 2 Flashcards
A Limited Partnership can be dissolved by written consent
Absent a contrary agreement of the partners
- Of all General Partners
- Withdrawal or Death of a General partner
- Judicial Decree
- Withdrawal of the only General Partner would cause dissolution
There has to be at least 1 General Partner in a Limited Partnership
In a General Partnership
When a partner assigns his or her interest in the partnership
The effect:
Transfer the partner’s right to receive partner’s share of profits or surplus ONLY
The assignment doesn’t cause dissolution or make the assignee a new partner
Assignor is still the partner and is liable for future and past partnership debts
After a dividend is declared BUT NOT paid on Cumulative Preferred Stock
The unpaid dividend ranks with other “unsecured” debts
BYLAWS
INTERNAL DOCUMENT for Corps
Rules for managing a CORP
OPERATING AGREEMENT
INTERNAL DOCUMENT for LLC
For LLC Members that outlines how the LLC will be run
NOT filed with the state
ARTICLES OF INCORPORATION
Used to form a corporation
ARTICLES OF ORGANIZATION
Documents to file with the state to form an LLC
To file a voluntary bankruptcy petition under Chapter 7
No need to be insolvent
No requirement for number of Creditors
An Involuntary Petition requires at least 3 or more creditors
Petition is usually from Creditors
Voluntary Dissolution of a Corporation requires the
Filing of articles of dissolution with the state
Transfers made within 2 years of the filing date with
An Intent to:
- hinder
- delay
- or defraud creditors
Unemployment Insurance System
Is administered by the states through their employment laws
Limited Liability Company
- Limit Liability
- Avoid Double Taxation
- Be active in Management
General Partnership
Has Unlimited Liability
Limited Partnership
Both Limited & General Partners
Have no liability beyond their investment, BUT have no right to manage or control
They cannot have both limited liability and the right to manage
Shareholders have the right to
Elect and Remove directors through the voting process
Registered Agent
Agent for Corp
Accept Service of Process (be served)
For Corporations
Ownership interests in a corporation are most freely transferable w/o consent of the other owners.
UNLESS transferability is restricted by contract (restricted shares, voting trusts, or voting agreements), there are no restrictions on the sale of corporate stock by its owners
Partnership, Limited Liability Partnership and Limited Liability Company
Partners in any type of partnership cannot assign the right to be a partner w/o unanimous consent of all other partners
Limited Liability Partnership
- Does not pay Federal Income Taxes
- Not liable for debts or contracts of the business
LLC or a Corporation
Can offer all of their owners protection from personal liability for business contracts
After secured creditors are paid
The unsecured creditors entitled to a priority are paid
Claims for alimony have the first priority among unsecured creditors
Pertaining to FUTA
All employers who have quarterly payrolls of at least $1,500 or who employ
At least 1 person 1 day a week for 20 weeks in a year must participate in FUTA
Social Security tax for a self-employed person is
Based on NET PROFIT from self-employment (subject to certain max limitations)
For employees, this tax is based on gross wages (with some adjustments)
A voluntary petition in bankruptcy will be denied
If the Debtor failed to keep or preserve adequate books and records
A court appointed trustee may serve as both a trustee of an estate
AND
Also be its tax return preparer if authorized by the court.
The CPA may receive a separate fee for services rendered in each capacity
The Creditors’ Committee
If appointed, is made up of unsecured creditors
