BUS 263 EXAM 4 VERIFIED STUDY GUIDE
Sole Proprietorship - Answers - a business with one owner who is personally liable for
all debts and receives all profits. It's the simplest type of business structure to form.
Partnership: General - Answers - a business where two or more people share the profits
and losses of a business. General partners have unlimited personal liability for the
business's debts.
General Agency Powers - Answers - General agency powers allow an agent to perform
a wide range of tasks on behalf of a principal. These powers can apply to ongoing
responsibilities, such as managing a business, handling finances, or supervising
employees.
Joint & Several Liabilit - Answers - Joint and several liability is a legal concept that holds
multiple parties jointly responsible for the full amount of an obligation. This can apply to
debts, leases, and tort
Fiduciary Duty - Answers - Fiduciary duty is a legal obligation to act in the best interests
of another person or entity. Fiduciaries must put the interests of their clients, also known
as beneficiaries or principals, ahead of their own.
Pass-Through entity - Answers - A flow-through entity is a legal entity where income
"flows through" to investors or owners; that is, the income of the entity is treated as the
income of the investors or owners. Flow-through entities are also known as pass-
through
Franchises: Chain Style, Distributorship, Manufacturin - Answers - In franchising, "chain
style" refers to a business model where multiple locations operate under the same
brand and follow a standardized system, like a fast food chain; "distributorship" involves
selling a manufacturer's products within a designated territory, often with less brand
integration;and "manufacturing" signifies a franchise where the franchisee is involved in
producing goods according to the franchisor's specifications, sometimes including the
right to sell those products under the brand name.
Know the liability (limited or unlimited) of each type ofbusiness - Answers - A sole
proprietorship and a general partnership have unlimited liability meaning the owner(s)
are personally liable for all business debts, while a limited liability company (LLC) and
corporation have limited liability where the owners' personal assets are protected from
business debts; only the business itself is liable for its debts.
Advantages & disadvantages of each type of busines - Answers - The advantages and
disadvantages of a business depend on the type of business structure, such as a sole
proprietorship, partnership, corporation, or limited liability company (LLC).
Sole Proprietorship - Answers - a business with one owner who is personally liable for
all debts and receives all profits. It's the simplest type of business structure to form.
Partnership: General - Answers - a business where two or more people share the profits
and losses of a business. General partners have unlimited personal liability for the
business's debts.
General Agency Powers - Answers - General agency powers allow an agent to perform
a wide range of tasks on behalf of a principal. These powers can apply to ongoing
responsibilities, such as managing a business, handling finances, or supervising
employees.
Joint & Several Liabilit - Answers - Joint and several liability is a legal concept that holds
multiple parties jointly responsible for the full amount of an obligation. This can apply to
debts, leases, and tort
Fiduciary Duty - Answers - Fiduciary duty is a legal obligation to act in the best interests
of another person or entity. Fiduciaries must put the interests of their clients, also known
as beneficiaries or principals, ahead of their own.
Pass-Through entity - Answers - A flow-through entity is a legal entity where income
"flows through" to investors or owners; that is, the income of the entity is treated as the
income of the investors or owners. Flow-through entities are also known as pass-
through
Franchises: Chain Style, Distributorship, Manufacturin - Answers - In franchising, "chain
style" refers to a business model where multiple locations operate under the same
brand and follow a standardized system, like a fast food chain; "distributorship" involves
selling a manufacturer's products within a designated territory, often with less brand
integration;and "manufacturing" signifies a franchise where the franchisee is involved in
producing goods according to the franchisor's specifications, sometimes including the
right to sell those products under the brand name.
Know the liability (limited or unlimited) of each type ofbusiness - Answers - A sole
proprietorship and a general partnership have unlimited liability meaning the owner(s)
are personally liable for all business debts, while a limited liability company (LLC) and
corporation have limited liability where the owners' personal assets are protected from
business debts; only the business itself is liable for its debts.
Advantages & disadvantages of each type of busines - Answers - The advantages and
disadvantages of a business depend on the type of business structure, such as a sole
proprietorship, partnership, corporation, or limited liability company (LLC).
