Business Law Questions?
I have lots of questions for those of you who are bored. My professor is giving a test tomorrow over these topics and doesn't bother teaching us anything, but he did give us this list of questions to help us study. If you want to answer a couple, please write the question number and the answer by it below. Thanks in advance!
1. What is a sole proprietor?
2. What kind of liability does a sole proprietor have?
3. What is a franchise?
4. What is a franchisor? One who grants a franchise to someone else.
5. What is a franchisee? One who is granted the franchise.
6. What is a manufacturing franchise?
7. May a franchisor specify the business organizational form for the franchise?
8. May a franchisor require the franchisee to pay it a percentage of his annual sales/volume of business?
9. What’s the best way a franchisor can standardize the pricing practices of it’s franchisees?
10. Recognize an example of a partnership agreement that is legally binding only if it is in writing.
11. Recognize an example of a partnership that would be dissolved by an act of government.
12. Is greater organizational flexibility an advantage of a sole proprietorship? Yes.
13. What’s the best way for a sole proprietorship to obtain additional business capital and still maintain it’s own control?
14. Does contact law govern franchise relationships?
15. What must the franchisor disclose to someone interested in buying a franchise?
16. What is the purpose of the Federal Trade Commission’s Franchise Rule?
17. When will a franchise terminate if the agreement doesn’t specify a certain time of termination?
18. May the franchisor require the franchisee to pay a percentage of franchisor’s advertising cost?
19. What will the franchisor likely chare the franchisee for the franchise?
20. For the purposes of suing and being sued, is a partnership treated as an entity?
21. What’s a Pass-Through-Entity?
22. When will a partnership terminate if the agreement doesn’t specify a termination date?
23. Recognize an example of dissolution of a partnership?
24. Is a single partner entitled to inspect all of the partnership’s books and records?
25. Unless a partnership agreement states otherwise, is a partner entitled to compensation as opposed to just his part of the profits?
26. How is an Limited Liability Company (LLC) normally taxed?
27. Have LLC laws been adopted in all states?
28. For the purposes of suing and being sued, is an LLC a legal entity apart from the owners?
29. Is an LLC member an owner?
30. What is the minimum number of members that an LLC must have?
31. To what extent is an LLC member liable for its debts?
32. Is flexibility an advantage of an LLC with respect to tax options?
33. Are all LLC members considered to be participants in LLCs management?
34. To what extent can an LLC member participate in LLC’s management?
35. What governs a dispute among LLC members if an operating agreement doesn’t cover it?
36. How are the voting rights of an LLC apportioned?
37. What does dissociation of an LLC mean?
38. What is the advantage of an LLP with respect to avoiding personal liability?
39. What document has to be filed to create an LP?
40. What document has to be filed to create an LLC?
41. How many general partners and limited partners must an LP have?
42. To what extent is a limited partner in an LP personally liable for an LP that can’t pay its debts?
43. What is an obvious ways that a limited partner can lose their limited liability in an LP?
44. Upon the dissolution of a LP, who gets paid 1st from the assets?
45. Is the liability of an LLC member similar to that of a shareholder in a corporation?
46. What determines how the profits/losses are to be divided?
47. Are limited partners in an LP entitled to total access to the LP’s books?
48. Recognize an example of dissolution of an LP?
49. What has to happen for an LP to continue in business if one of its general partners dies?
50. To what extent is a general partner in an LLLP personally liable for the LLLP is the can’t pay their debts?
- JaredLv 68 years agoFavorite Answer
1&2. A sole proprietor is a business owner who uses his own social security number for the business. All income/loss is reported on his personal tax return. He has unlimited liability for business actions.
20. A partnership is entitled to having its own FEIN. It is a registered legal entity. It can sue or be sued. In all likelihood, a simple partnership being sued would have its principals sued also. i.e. XYZ Corp sues ABC Parternship, which has two members, D & E: XYZ Corp. will likely sue ABC Partnership and D & E, personally.
21. A pass-thru entity is one where income/losses pass through to owners. S-Corps and LLCs are examples.
26. An LLC has pass-thru income to the owners, so it is not directly taxed by the federal or state governments. It is, however, taxed by the Secretary of State of the state in which it is established (franchise taxes). It's income is taxed on the federal (and state level, if applicable) -- on the owner(s)'s personal tax returns.
33. LLC members are not, by definition, considered to be managers of the operation. This is one of the main points.
I'm going to stop here and just give you the idea of why a person forms an LLC.
Let's say I live in Tampa, Florida. I decide I'm going to buy an apartment complex in Houston, TX. I know that I will not be in Houston very often. So, I form an LLC (as a member/owner), and I designate John Doe as the manager. I will have limited liability to the extent that I am not responsible for the actions of John Doe, manager.
If a member of an LLC wants limited liability, he MUST NOT ALSO MANAGE the operations of the LLC.
If a person wishes to OWN and MANAGE an entity, and have limited liability, he or she should form a corporation.Source(s): CFO