BLAW 3391 Pleasant Exam 2 Questions With Verified Answers

BLAW 3391 Pleasant Exam 2 Questions With Verified Answers One who initiates and assumes the financial risk of a new business enterprise and undertakes to provide or control its management - answerEntrepreneur The simplest form of business organization, in which the owner reports business income on his or her personal income tax return and is legally responsible for all debts and obligations incurred by the business. - answerSole Proprietorship You can establish without filing any legal documents. 1) choose a Business name 2) file an assumed business name w/ County Clerk 3) obtain licenses, permits, and zoning clearance. 4) Obtain an Employee identification # from IRS website - answerSole Proprietorship in TX Any arrangement in which the owner of a trademark, trade name, or copyright licenses another to use that trademark, trade name, or copyright in the selling of goods and services (expensive!!!) - answerFranchise One receiving a license to use another's (the franchisor's) trademark, trade name, or copyright in the selling of goods or services - answerFranchisee One licensing another (the franchisee) to use the owners trademark, trade name, or copyright in the selling of goods or services - answerFranchisor 1) Distributorship- Black Snow Beer Company (licensed to distribute/sell) 2) Chain-Style Business Operation- McDonald's (trade name) 3) Manufacturing or Processing Plant- Pepsi Cola (essential ingredients) - answerTypes of Franchises 1) Federal Regulation Of Franchising - contract law - the uuc -industry specific standards -the franchise rule 2) Stare Regulation of Franchising -state Disclosures -requirements for Termination -Case EX. Inc v. Volvo. - answerLaws Governing Franchises • Contract law - the franchise relationship is defined by a contract between franchisor and franchisee • The UUC - Article 2 • Industry Specific Standards - laws enacted by congress to protect franchisees • The Franchise Rule - requires franchisers to disclose certain material facts that a franchisee needs to know - answerMore on the FEDERAL REGULATION OF FRANCHISING An agreement by two or more persons to carry on, as co-owners, a business for profit. Each partner has Unlimited liability. Partners together have joint and several liability. Taxed as a pass through entity. - answerPartnership Governs the operation of partnerships in the absence of an expressed agreement. - answerThe Uniform Partnership Act (UPA) (not uniform) 1) sharing of profits 2) a joint ownership 3) equal right to be involved in management - answerDoes a partnership exist? A business entity that has no tax liability. The entity's income is passed through to the owners, and they pay taxes on the income. - answerPass-Through Entity (taxed) A tax return submitted by a partnership that reports the business's income and losses. The partnership itself does not pay taxes on the income, but each partners share of the profit (whether distributed or not) is taxed as individual income to that partner - answerInformation return A written agreement that sets forth each partner's rights and obligations with respect to the partnership. - answerArticles of Partnership A partnership imposed by a court when non-partners have held themselves out to be partners, or have allowed themselves to be held out as partners, and others have detrimentally relied on their misrepresentations - answerPartnership by Estoppel In Partnership law, an order granted by a court to a judgement creditor that entitles the creditor to attach a partner's interest in the partnership. - answerCharging Order In partnership law, the partners' shared liability for partnership obligations and debts. A third party must sue all of the partners as a group, but each partner can be held liable for the full amount. - answerJoint Liability In partnership law, a doctrine under which a plaintiff may sue, and collect a judgement from, all of the partners together (jointly) or one or more of the partners separately (severally, or individually) - answerJoint and Several Liability The severance of the relationship between a partner and a partnership. - answerDissociation The amount payable to a partner on his or her dissociation from a partnership, based on the amount distributable to that partner of the firm were wound up on that date, and offset by any damages for wrongful dissociation - answerBuyout Price The formal disbanding of a partnership or a corporation. Partnerships can be dissolved by acts of the partners, by operation of law, or by judicial decree. - answerDissolution • death • expulsion • illegality • retirement • bankruptcy - answerPartnership Dissolution The Second of two stages in the termination of a partnership or corporation, in which the firm's assets are collected, liquidated, and distributed, and liabilities are discharged. - answerWinding Up A hybrid form of business organization that is used mainly by professionals who normally do business in a partnership. An LLP is a pass-through entity for Tex purposes, but a partners