Download Business Association (20) | GBL 323 - Intro to Business Law and more Quizzes International Law in PDF only on Docsity! TERM 1 3 Common Forms of Business Organizations DEFINITION 1 Sole ProprietorshipPartnershipCorporation TERM 2 Sole Proprietorship DEFINITION 2 Someone who decides to go into business ALONE. "SOLE" Person is Liable for all profit and loss, and all "liability incurred by the business. Examples: neighborhood shoe store used book store large business with 1,000 employees owned by just one person TERM 3 Partnership DEFINITION 3 business organization formed by two or more people Partners are jointly liable for all profit and loss, if one partner can not pay their share of the judgment then the other partner takes on their share. profits must be reported by the partnership to the IRS, but are divided between partners and are considered personal income Each partner gets equal voting rights Partners hold equal voting rights unless expressed differently in written agreement TERM 4 Corporation DEFINITION 4 Legal Entity created by one or more person, the corporation is considered a person by law. Created by state law as a legal entity, considered a single "person" by law. Can have thousands of shareholders Can own property, party to contracts, sue and be sued, and has protection under constitution profit distributed to shareholders through dividends TERM 5 Dividing Spoils of General Partnership DEFINITION 5 Profits divided by total number of partners, no matter amount of investment Written agreement could dictate the division of profits Agreement must be in writing TERM 6 General Partnership Liability DEFINITION 6 Unlimited liability for debts, torts Old Common Law- the only way to exit a partnership is by death Modern Law- partner may be able to sell their partnership to someone outside the partnership TERM 7 Limited Partnership DEFINITION 7 Some partners can be protected from liability. Partners may have different size shares. profits are income of the individuals TERM 8 Corporate Advantages (2) DEFINITION 8 Limited Liability: for those who own part of the corporation(shareholders, owners) Ability to Obtain Capital: operating expense money used to start, operate and expand the corporate business TERM 9 Publicly Held Corporations DEFINITION 9 can be incorporated by individuals, a family, friends or a group of people, or taking a closely held corporation public Ownership can be obtained through an initial offering of shares Day-to-day operations placed in the hands of corporate officers who may or may not own stock. TERM 10 Multinational Corporations DEFINITION 10 conducts business in multiple nations Stock can be exchanged through stock exchanges throughout the world (NYSE, DAX, Hong Kong SE) Production facilities may be in multiple nations Distribution of products may be international.
