LEGL 2700 Final Exam UGA (Hackleman)
Questions and Answers 100% Pass
Closely Held Organizations - ✔✔small group of people (like family owned)
Publicly Held Organization - ✔✔A corporation that may have thousands of
stockholders and whose stock is regularly traded on a national securities
exchange.
basic forms of business organizations - ✔✔1. Sole Proprietorship
2. Partnership
3. Corporation
hybrid forms of business organizations - ✔✔-limited partnerships
-s corporations
-limited liability companies
-limited liability partnerships
factors to consider when picking a business' organization form - ✔✔1) cost
of creation (time, paperwork, money)
2) continuity of the organization (stability/ durability of business and impact
of disillusion)
,3) managerial control of decision (who manages the business)
4) owner liability (how personally liable is the owner of the business)
5) taxation (single/ double taxed)
Sole Proprietorship - ✔✔-business owned and operated by one person
-least expensive business organization
-continuity is tied directly to will of owner
-owner is in total control of the business' goals & operations
-no formal documentation necessary
-owner has unlimited liability for the obligations of the business organization
-not taxed as an organization (person is taxed)
-ownership (legal entity of sole proprietorship) can't be transferred
Example of sole proprietor - ✔✔writer, painter, vendor at farmers market
partnerships - ✔✔-agreement between 2 or more persons to share a
common interest in a commercial endeavor
-cost to form is minimal
-strongly recommended to get a legal partnership agreement
-state assumed name statute is necessary if names aren't included in
company name
-may need to dissolve partnership before adding a new person unless you
have the buy out clause
,-unlimited liability (jointly and unseverably liable)
-not a taxable organization
3 types of partnerships - ✔✔1. General
2. Limited
3. Limited Liability
partnership examples - ✔✔-2 doctors, general partners in same practice,
case brought against 1 doctor for negligence, both liable
-father and son both grow potatoes, own their own equipment/ land, once
harvested they advertise together with both names, a loss arises, both
liable
corporations - ✔✔-artificial and intangible entity created under the authority
of a state's law
-more expensive to form than sole prop/ partnership
-have their own personal taxation rate
types of corporations - ✔✔-domestic (located in original state it was formed
in)
-foreign (located in a state outside of it's originated state)
-alien (relocated from a different country)
, articles of incorporation - ✔✔a written legal document that defines
ownership and operating procedures and conditions for the business
-includes business name, purpose of business, intended timespan,
information about initial owners, etc.
Deleware - ✔✔-tons of corporations started here
-Delaware court of chancery (most prestigious business court in America)
-stable legal system
Tamika R. Montgomery-Reeves - ✔✔-from UGA
-first African American and second woman to serve on Delaware Chancery
-first African American on Delaware Supreme Court
fiduciary duty - ✔✔A legal obligation of one party to act in the best interest
of another.
proxy - ✔✔Agent, substitute, person authorized to act on behalf of another
corporate managerial control flow chart - ✔✔Shareholders -> board of
directors -> officers -> employees
-board of directors are elected
-officers and employees are hired
derivative suit - ✔✔a minority shareholder who believes a majority
shareholder has acted in his/ her personal interest to the detriment of the
Questions and Answers 100% Pass
Closely Held Organizations - ✔✔small group of people (like family owned)
Publicly Held Organization - ✔✔A corporation that may have thousands of
stockholders and whose stock is regularly traded on a national securities
exchange.
basic forms of business organizations - ✔✔1. Sole Proprietorship
2. Partnership
3. Corporation
hybrid forms of business organizations - ✔✔-limited partnerships
-s corporations
-limited liability companies
-limited liability partnerships
factors to consider when picking a business' organization form - ✔✔1) cost
of creation (time, paperwork, money)
2) continuity of the organization (stability/ durability of business and impact
of disillusion)
,3) managerial control of decision (who manages the business)
4) owner liability (how personally liable is the owner of the business)
5) taxation (single/ double taxed)
Sole Proprietorship - ✔✔-business owned and operated by one person
-least expensive business organization
-continuity is tied directly to will of owner
-owner is in total control of the business' goals & operations
-no formal documentation necessary
-owner has unlimited liability for the obligations of the business organization
-not taxed as an organization (person is taxed)
-ownership (legal entity of sole proprietorship) can't be transferred
Example of sole proprietor - ✔✔writer, painter, vendor at farmers market
partnerships - ✔✔-agreement between 2 or more persons to share a
common interest in a commercial endeavor
-cost to form is minimal
-strongly recommended to get a legal partnership agreement
-state assumed name statute is necessary if names aren't included in
company name
-may need to dissolve partnership before adding a new person unless you
have the buy out clause
,-unlimited liability (jointly and unseverably liable)
-not a taxable organization
3 types of partnerships - ✔✔1. General
2. Limited
3. Limited Liability
partnership examples - ✔✔-2 doctors, general partners in same practice,
case brought against 1 doctor for negligence, both liable
-father and son both grow potatoes, own their own equipment/ land, once
harvested they advertise together with both names, a loss arises, both
liable
corporations - ✔✔-artificial and intangible entity created under the authority
of a state's law
-more expensive to form than sole prop/ partnership
-have their own personal taxation rate
types of corporations - ✔✔-domestic (located in original state it was formed
in)
-foreign (located in a state outside of it's originated state)
-alien (relocated from a different country)
, articles of incorporation - ✔✔a written legal document that defines
ownership and operating procedures and conditions for the business
-includes business name, purpose of business, intended timespan,
information about initial owners, etc.
Deleware - ✔✔-tons of corporations started here
-Delaware court of chancery (most prestigious business court in America)
-stable legal system
Tamika R. Montgomery-Reeves - ✔✔-from UGA
-first African American and second woman to serve on Delaware Chancery
-first African American on Delaware Supreme Court
fiduciary duty - ✔✔A legal obligation of one party to act in the best interest
of another.
proxy - ✔✔Agent, substitute, person authorized to act on behalf of another
corporate managerial control flow chart - ✔✔Shareholders -> board of
directors -> officers -> employees
-board of directors are elected
-officers and employees are hired
derivative suit - ✔✔a minority shareholder who believes a majority
shareholder has acted in his/ her personal interest to the detriment of the
