Final Review 2 April 28th

Final Review 2 April 28th - Chapters 6 and 7 I LLC a b c d...

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Chapters 6 and 7 I. LLC a. The members all have limited liability b. Limited liability: creditor can sue business for deb but they can’t sue the individual c. Their only action can be against the LLC d. No limit to size e. All can participate in management (not true for Limited Partnership) II. Partnership a. If not specified everyone has equal share of profits and losses b. Creditors can come after anyone to get return on debt c. All can bind the business III. LLP a. This is a group of professionals b. Gives you limited liability for torts committed by colleagues c. Do have liability for your own torts d. Reason you organize as an LLP is to attain tort protection from acts of colleague IV. Corporation a. Only entity that we’ve studied that pays taxes as a business entity b. The others pass it on to individual owners c. The shareholder, the officer, and the board of directors i. Shareholder 1. Owns the business but doesn’t participate in management of it 2. Vote for the board of directors ii. Directors 1. Run the organization 2. Have the right to hire and appoint officers iii. Officers 1. Carry out the actual day to day work d. Articles of Incorporation i. Document that is needed to start filing of corporation ii. Filed with Secretary of State iii. Name of organization, what type of business will be involved in, location of corporate office, who your agent of service of process is, how much stocks is your company going to be allowed to issue iv. Will not find names of shareholders, board of directors, and officers e. Shareholders derivative action i. Lawsuit by shareholders against officers and directors for mismanagement ii. If the directors and officers don’t use good business judgment and their actions cost the shareholders money, then the shareholders can sue them f.
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