Business Associations - Business Law - Lecture Slides, Slides of Commercial Law

Download Business Associations - Business Law - Lecture Slides and more Slides Commercial Law in PDF only on Docsity! Business Associations (Organizations) A group of two or more people (or even one person) can create a new “person” or “entity” under the law that does business, has rights, has limits, can create liability etc. The type of organization greatly determines the extent of these privileges and duties. Docsity.com The Concept of an “Entity” • A business organization is often a unique entity, separate from its owners. • The entity has a birth place • The entity has a place(s) of residence • Concept of agency critical to many forms of business organization Docsity.com Business Organizations Sole Proprietorship Partnership Corporation Hybrids Limited Liability Company (LLC) Docsity.com Sole Proprietorships The Original Form of Business Advantages Simple Single Taxation Disadvantages Unlimited Liability Limited Growth Attracting Capital • This form of business happens “automatically” when a person does business of his or her own and does not have some other type of business org. Docsity.com Partnerships The Other Common Law Form of Business Advantages Still Simple Single Taxation Disadvantages Unlimited Liability* Growth Potential Attracting Capital People Resources The Uniform Partnership Act (UPA) – adopted in most states Docsity.com Corporations- Basic Concepts • A statutory immortal being. • Shareholders/ Directors/ Officers/ Employees • “Exists” in one particular state • Shareholders vote and elect Directors • Directors are called the “Board of Directors” and must meet regularly, vote to approve or disapprove actions and must have meeting minutes • Officers execute the orders of the Board Docsity.com Limited Liability Company (LLC) Advantages Limited Liability Flexibility Disadvantages People Resources A very new creation that merges the basic sought after benefits of Limited Liability and Single Taxation with little administrative complexity Ease of Creation Growth (perhaps) Legal Uncertainty Single Taxation Docsity.com LLC- Basic Concepts • Owners are called “Members” • Usually created by filing “Articles of Organization” with state. • Many states allow single owner LLC’s • Often an “operating agreement” is created between members to govern their relationship, obligations and rights. Docsity.com