the legal environment of business a critical thinking approach 6 th edition nancy k. kubasek bartley...
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The Legal Environment of Business
A Critical Thinking Approach
6th Edition
Nancy K. Kubasek
Bartley A. Brennan
M. Neil Browne
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CHAPTER 17
Law and Business Associations - I
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Objectives
1. Factors Influencing a Business Manager’s Choice of Organizational Form
2. Some Common Forms of Business Organization in the United States
3. Specialized Forms of Business Associations4. Global Dimensions of Business Associations
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Forms of Business Organization
Sole Proprietorship
Partnership
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Few legal formalities
Minimal government regulation
Owner-proprietor has complete control, profits, and
Full liability
Sole Proprietorship
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A voluntary association of two or more persons to carry on business for a profit
Partnership
Limited Partnerships
General Partnerships
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General Partnerships
Unless otherwise specified in partnership agreement:
All partners equally liable
Equal management power
Equal division of profits/losses
Partnership is not taxed; partners are taxed
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Limited Liability Partnerships
A partnership that has one general partner,who is responsible for managingthe business, and one or morelimited partners, who invest in thepartnership but do not participatein its management and whoseliability is limited to the amount ofcapital they contribute.
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Limited Liability
LP LLP LLLP
distinguished from a limited partnership in that liability is the same for a general partner(s) as for a limited partner(s).
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Limited Partnerships Must say the word “Limited”
One general partner
One or more limited partners
Limited partners are liable only up to the amount invested
General partner manages day-to-day business
Governing law: RULPACopyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 17-10
Creating Partnerships If not written agreement: RULPA controls In partnership agreements, partners
control: capital contribution profit distribution
management responsibility
duty of loyalty, good faith, and fair dealings
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Termination of Partnership
Death of partner
Merger
Bankruptcy
Expiration of partnership agreement
Winding-up
Dissolution
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Specialized Forms of Partnership
A joint stock company is a partnership agreement in which members agree to stock ownership in exchange for partnership liability.
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Specialized Forms of Partnership
Syndicate investment group that makes a private
agreement to come together for the purpose of
financing a large commercial project that the individual members
(partnerships or corporations) could not finance alone
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Specialized Forms of Partnership
Joint Venture relationship between two or more
persons or corporations set up for a specific business
undertaking or a limited time period
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Specialized Forms of Partnership
Franchising relationship is based on a private
commercial agreement between the franchisor, who owns a trade
name or trademark, and the franchisee,
who sells or distributes goods using the trade name or trademark
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Global Dimensions of Business Associations
worldwide trend toward market-oriented economies
raise the demand for investment capital
manufactured goods and services of the industrialized world
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Covered Objectives
1. Factors Influencing a Business Manager’s Choice of Organizational Form
2. Some Common Forms of Business Organization in the United States
3. Specialized Forms of Business Associations
4. Global Dimensions of Business Associations
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Copyright © 2012 Pearson Education, Inc. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice HallPublishing as Prentice Hall
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