BLAW 3391 Exam 2 TTU Questions With Verified Answers 100% Solved

BLAW 3391 Exam 2 TTU Questions With Verified Answers 100% Solved sole proprietorship - answerbusiness owned and operated by one person unlimited liability - answerlegal exposure in which an owner of a business is personally liable for all of the debts and obligations of the business what is the most popular form of business organization in the US? - answersole proprietorship sole proprietorship advantages - answer-easily established -no partners or shareholders -only pay taxes on income generated -all after tax profit stays with the owner -minimal government regulation sole proprietorship disadvantages - answer-owner mush bear all costs of set up and maintenance -no others to share burden or add expertise -unlimited liability for debts -unlimited liability for malpractice sole proprietorship examples - answertutor, housecleaning service, home health aid, bookkeeper, freelance writer steps to establishing a sole proprietorship - answer1) choose a business name. check the state comptroller's website 2) file an assumed business name with the county clerk 3) obtain licenses, permits, and zoning clearance 4) obtain an employer identification number from the IRS website franchise - answera business in which the owners, or "franchisors" sell the rights to their business logo, name, and model to third party retail outlets, owned by independent, third party operators called "franchisees" types of franchises: distributorship - answera manufacturer (the franchisor) licenses a dealer (the franchisee) to sell its product. ex: ford or miller types of franchises: chain-style business operation - answera franchise operates under a franchisor's trade name and is identified as a member of a select group of dealers that engage in the franchisor's business. ex: century 21, toni & guy, panera bread types of franchises: manufacturing or processing-plant arrangement - answerthe franchisor transmits to the franchisee the essential ingredients or formula to make a particular product. the franchisee then markets the product either at wholesale or at retail in accordance with the franchisor's standards. ex: pepsi contract law - answerthe franchisee relationship is defined by a contract between the franchisor and the franchisee industry-specific standards - answerlaws enacted by congress to protect franchisees in certain industries like automobile manufacturers and service stations the franchise rule - answercreated by the FTC to protect franchisers by requiring franchisers to disclose certain facts to a prospective franchisee to make an informed decision before signing a contract to franchise their company partnership (general partnership) - answera business owned and operated by 2 or more persons uniform partnership act (UPA) - answer-all states have adopted. -governs the operation of partnerships in the absence of an express agreement. therefore, the partners are free to establish rules for their partnership that differ from those stated in the UPA. -a corporation can be a partner in a partnership in determining whether a partnership exists, courts usually look for three essential elements: - answer1) a sharing of profits and losses 2) a joint ownership of the business 3) an equal right to be involved in the management of the business advantages of a partnership - answer-each partner has the right to share in the profits of the business -each individual partner will be responsible for paying the income taxes on those profits (or deduct losses)