By operation of law death of a partner bankruptcy of

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By Operation of Law Death of a partner Bankruptcy of a Partner Bankruptcy of partnership Illegality By Judicial Decree: Insanity  Incapacity Business Impracticality Improper Conduct Other Circumstances (personal dissension) Winding Up:  after dissolution, partnership continues to wind up the partnership affairs.  Partners have no authority except to: Complete transactions already begun Collect and preserve partnership assets, discharge liability, and provide an accounting Partnership obligations are paid in the following order: 1. Payment of debts, including those owed to partner and nonpartner creditors 2. Return of capital contributions and distribution or profits to partners If liabilities are greater than assets, partners bear losses in proportion in which they  shared profits, unless agreed otherwise Corporate Formation and Financing What is a corporation? A corporation is a creature of statute, an artificial “person.” Corporations can have one or more shareholders. Owners can be natural persons or other businesses. Corporation substitutes itself for shareholders. What are the characteristics of a corporation?
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Responsibility for overall management of company rests with  board of directors  (elected  by shareholders). Board of directors makes policy decisions and hires officers to run corporation on a daily  basis. Shareholders can sue corporation and be sued by corporation and bring suit for  corporation in some instances. What are the liabilities of the corporation and its officers and directors and  shareholders? Corporation is recognized as a legal “person” and enjoys virtually same rights and  privileges under our Constitution as a natural person: Access to court systems. Constitutional guarantees of free speech, due process, and freedom from unreasonable  search and seizures Limited Liability of Shareholders. One of the key advantages of corporations is the limited liability of owners  (shareholders).  In certain situations, the corporate “veil” of limited liability can be pierced, holding the  shareholders personally liable.  Taxes Corporate Earnings and Taxation. Corporate profits can either be kept as  retained earnings  or passed on to the  shareholders as  dividends. Corporate Taxation : corporate taxes can be taxes twice, first to the corporation, then to  the shareholders via dividends.  Holding Companies (parent company):  company whose business activity consists of  holding shares in another company.
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