Mytest3review without pages.docx

Mytest3review without pages.docx - BLAW test 3 review 13th...

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BLAW test 3 review 13 th edition Chapter 12 Business entities o Limited liability company A limited liability company (LLC) is a business organization that is treated like a corporation for liability purposes but like a partnership for federal tax purposes. The profits are taxed only once as LLC owners’ income. Personal liability o What is the rule of liability of members of an LLC (owners of interest)? no member or manager is personally liable for the debts of an LLC. However, members may agree by contract to be personally liable for the company’s debts. members have a membership interest in the company, somewhat like owning stock in a corporation or being a limited partner in a limited partnership. Unless the agreement says otherwise, members may not transfer membership interests without consent of other members as provided in the operating agreement. o Morrissey v. Krystopowicz Guy owned corporation, corporation owned LLCs, and LLCs owned nursing home where someone died. The family sued. Because of Piercing the corporate veil , court held ultimate owners liable. o Limited partnerships – relationship of the parties At least 1 general partner and at least 1 limited partner Limited partners are kind of shareholders o Don’t have management power o Liability is limited to what they put into the corporation (shares) Limited partners lose their limited liability and become general partners if they take an active role in managing the business o what is a partnership? At least 2 ppl that own business together and make joint decisions and share profits You don’t even have to know you have one, you’d still have one though o Know difference between a general and limited partnership Limited – at least 1 general partner and at least 1 limited partner File a document with the state Don’t have control Regular – at least 2 general partners Don’t have to file a document Have control o what power do shareholders have ? To vote for things like directors, mergers, dissolutions, and selling major assets
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o difference between a sole proprietor and a partnership Sole – one owner Partnership – more than one owner Both are bad, b/c of unlimited liability (personal) o decisions made by a partnership on which all partners have to agree Admitting a new partner, going out of business, changing business of the partnership, selling assets o business judgement rule Protects directors – they can’t be sued if they acted in good faith, studied the problem, heard experts, read reports, had no pecuniary interest in issue. They are protected as long as they were honest errors of judgement and followed those steps o what do you call it when you give someone else your right to vote in a corporation Proxy Chapter 13 Negotiable instruments o promises to pay – notes What is the name of the parties that appear on the front of note Maker that signs in the lower right-hand corner.
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  • Fall '16
  • Corporation, Limited partnership, Types of business entity

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