Chapter 14 Environment of Business

A Corporate Name

-is an asset and an aspect of goodwill -should typically include one of the following words or end with an abbreviation of them: corporation, company, Inc., or limited

Nonprofit organizations

1- are not created for the personal benefit of owners or members 2- must return any profits made to the organization to be used for future corporations

Identify the disadvantages of the corporate form of organization

1- franchise taxes and license fees are assessed against corporations 2- corporations are subject to more governmental regulation at all levels than are other forms of business 3- The cost of forming and maintaining a corporation is significant

Identify the true statement about a limited liability company

1- it's owners have more flexibility than those of an S corporation 2- it is created their filings like those used when creating a perforation

Techniques used by corporations to avoid the double taxation of corporate income include

1- providing expense accounts for employees to purchase travel, food, and entertainment 2- electing to file under sub chapter as of the Internal Revenue Code 3- excluding interest bearing loans from shareholders from the corporations capital structure

Disadvantages of partnership as a form of business organization

1-only a limited number of people can be partners for practical reasons 2-A partnership is dissolved anytime a partner Caesars to be a partner, regardless of whether the reason is with drawl or death

Any change in the ownership of an organization that changes the legal existence of the organization is known

A dissolution

Articles of partnership

A formal agreement explicitly stated among the parties entering into a partnership and drafted into a formal document

An agent appointed by shareholder for the purpose of voting the shares in a publicly held corporation is known as

A proxy

Many individuals prefer the corporate form of organization is because

Control may be held by those with the minority of the investment

As a form of business corporation may not be always beneficial because

Corporate income may be subject to double taxation

In the context of the different forms of business organizations, an artificial, intangible entity created under the authority of a state law is known as

Corporation

A partnership is a preferable form of business organization because

Costs of formation or not significant

In the context of the significant factors one should consider when selecting the best organizational form for a business activity, _________ refers to the legal steps necessary to form a particular business organization

Creation

A limited partner in a limited partnership retains the benefit of limited personal liability when he or she

Disapproves an amendment to the partnership certificate

Partnerships limited partnerships or corporations can be shareholders an S corporation

False

True or false a dissolution destroys the business of a partnership

False

True or false: simply alleging that a person is a sole owner of a corporation that that is engaged in wrongful activity will result in a piercing of the corporate veil

False

A feature of the partners in a general partnership is that they

Have unlimited liability for their organizations debts

A characteristic of a soul proprietor is that he or she is

In total control of his or her business's goals

A corporation is created by a state issuing a charter upon the application of individuals known as

Incorporators

A characteristic of sole proprietorship is that it

Is the easiest business organization to create

Implied authority

It arises from a position of authority how about an agent in by the history of actual authority situations

A feature of a partnership is that

It is easily formed when compared to other forms of business organizations with the exception of a sole proprietorship

Identify a true statement about a derivative suit brought by minority shareholder in a closely held corporation

It may seek to collect damages for the corporation

Termination can involve

Liquidating or winding up of a business

Apparent authority

May arise in a situation where principal terminates in agents authority but fails to inform third parties about the termination

An agreement between two or more persons to share a common interest in a commercial endeavor and to share profits and losses

Partnership

The members of the board of directors of a corporation are elected by the

Shareholders

Identify a true statement about the three interacting parties involved in the application of agency law

The actions undertaken by agents implicate contract or criminal law

Respondeat superior

The legal doctrine that states that any time in employee is liable for tortious acts in the scope of employment the employer is also liable

Dissolution can mean

The legal form of an organization does not exist anymore

When an individual is selecting the best organizational form for his or her business he or she should consider

The taxation of the organization's earnings

When a corporation is dissolved in his assets are distributed as capital gains to shareholders

This can lead to double taxation on corporate income

true or false, The limited partners have no right to participate in management

True

Ratification

Who is with the principal voluntarily decided to honor in agreement which otherwise would not be binding due to an agent lack of authority

Actual authority

is the express and implied powers of an agent.