Chapter 11-Flow Chart

Chapter 11-Flow Chart - Legl 2700 TORT LIABILITY Chapter...

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Legl 2700 Chapter 11-Flow Chart 04/04/09 Agency Law and Business Organizations TORT LIABILITY 1) Respondeat Superior (“Let the master reply”) 2) Frolic and Detour- Defense employer has to the strict liability of respondeat superior CONTRACTUAL LIABILITY 1) Actual Authority 2) Implied Authority 3) Apparent Authority SOLE PROPRIETORSHIP 1) Creation - Easiest and least expensive to create (legally, no formal documentation is needed) 2) Continuity - Proprietorship’s continuity is tied directly to the will of the proprietor, ownership of a sole proprietorship cannot be transferred 3) Managerial control - Has complete control 4) Liability -Owner has unlimited liability; creditors can see proprietor’s personal belongings 5) Taxation - Not taxed as an organization; only proprietor is taxed on the income earned PARTNERSHIPS 1) Creation - Formal agreement= articles of partnership ; does not need to get permission from each state in which it does business 2) Continuity - Dissolved any time there is a change in the partners (one dies, retires, or withdraws, or they add a new partner). The dissolution does not necessarily destroy the business of a partnership; it just simply means the legal form of the organization does not exist. 3) Managerial Control - Each partner has equal voice unless the agreement states otherwise. 4) Liability - All partners in a general partnership have unlimited liability therefore the
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