fall 2010 bule 402 business orgs

fall 2010 bule 402 business orgs - Business Organizations...

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2/6/11 Business Organizations Today’s topics: Starting A Business: LLCs and Other Options Life and Death of a Corporation Corporate Management
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Click to edit Master subtitle style 2/6/11 Chief Executive Cat
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Click to edit Master subtitle style 2/6/11 I'm the sole proprietor!
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2/6/11 Starting a Business How do you chose type of entity? What factors should you consider?
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2/6/11 I want to Open my pink cupcake bakery Sell chai tea Open a funky handmade clothing store with my best friend Start a law firm with my law school study group Start an accounting firm 10 SOM classmates
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2/6/11 Factors?
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2/6/11 Types of entities Sole proprietorships Corporations Close S – corps LLCs General Partnerships LLPs
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2/6/11 Sole Proprietorships A sole proprietorship is an unincorporated business owned by one person. Sole proprietorships are easy and inexpensive to create and operate. Earnings are reported on the owner’s personal tax returns.
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2/6/11 Corporations Historical background First state to permit routine incorporation?
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2/6/11 Corporations Corporations offer limited liability – usually the managers’ and investors’ personal property is not at risk. Corporate stock can be bought and sold, making investments easy to get. Perpetual existence
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2/6/11 Close Corporations “Close corporation” and “closely held corporation” refer to a corporation whose stock is not publicly traded on a stock exchange. Common provisions of close corporations: Protection of Minority Shareholders
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2/6/11 “S” Corporations Shareholders of S corps have the best of all worlds: the limited liability of a corporation and the tax status of a partnership. The disadvantages of an S corp are: There can only be one class of stocks. There can be no more than 75 shareholders. Shareholders cannot be partnerships or other
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2/6/11 Limited Liability An LLC offers the limited liability of a corporation and the tax status of a partnership, without the disadvantages of an S corporation. The LLC is popular because it has: Limited Liability, Favorable Tax Status, Duration, Management, Flexibility The biggest disadvantage with LLC is the legal uncertainty involved since it is a
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2/6/11 LLCs and Corporations in Virginia Where do you file?
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2/6/11 Piercing the “LLC” Veil Does the corporate doctrine of piercing the corporate veil apply to LLCs? See BLD Products, LTC v. Technical Plastics of Oregon, LLC, text page 781. Note – the court!
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2/6/11 What form of business do you use? Answer: we are best friends, so we use a partnership. It just works for us, now!
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General Partnership A partnership is an unincorporated association of two or more co- owners who carry on a business for profit. Each co-owner is a general
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This note was uploaded on 02/05/2011 for the course BULE 402 taught by Professor Shubin during the Fall '10 term at George Mason.

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fall 2010 bule 402 business orgs - Business Organizations...

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