PRL 101 slides, Nov. 19

CC-BY-SA

Transcript

1. Business Organizations
   cc licensed ( BY NC ) flickr photo by Thomas Hawk: http://flic.kr/p/9eoP2B
   

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2. creative commons licensed (BY-ND) flickr photo by
   Massachusetts Office of Travel & Tourism:
   https://flic.kr/p/ctVJUm
   In-class assignment
   

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3. Sole proprietorship
   • Easy/inexpensive to form
   • Single taxation
   • Few formalities
   • Limited capital
   • Limited lifespan
   • Unlimited Liabilities
   • d/b/a
   

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4. Partnership
   • Easy/inexpensive to form
   – Partnership agreement a good idea
   – Partnership Act forms default rules
   • More access to capital
   • Limited lifespan
   • Joint/Several liability
   

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5. Partnership law
   Most states (incl. Ala.) have adopted
   Uniform Partnership Act of 1914 (UPA)
   and Revised Uniform Partnership Act of
   1997 (RUPA)
   RUPA forms default rules for partnerships
   

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6. Default?
   What font do most MS Word documents
   use?
   Times New Roman
   Calibri
   Are those the only fonts Word can do?
   Why so prevalent?
   

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7. creative commons licensed (BY-NC-SA) flickr photo
   by Earl - What I Saw 2.0: https://flic.kr/p/4JKDDT
   

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8. Profit split?
   Equally, unless specifically agreed otherwise
   

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9. Right to pay for work?
   No, unless specifically agreed otherwise
   

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10. Management rights?
    Equal vote, unless specifically agreed
    otherwise
    

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11. Bank of America: http://www.flickr.com/photos/scarequotes/
    

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12. cc licensed ( BY SD ) flickr photo by Derek Keats: http://flic.kr/p/8SgDT
    

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13. cc licensed ( BY NC ) flickr photo by Shira Golding: http://flic.kr/p/6GMmTe
    

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14. Liability for loan?
    

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15. cc licensed ( BY NC ND ) flickr photo by Matthew Niemi: http://flic.kr/p/KC3LA
    

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16. Corporations
    Benefits
    • limited liability
    • increased availability of capital
    (from multiple shareholders)
    • perpetual duration
    

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17. Corporations
    Disadvantages
    • increased formalities
    • must hire attorney & file w/
    secretary of state to form
    • Business Privilege Tax
    • double taxation*
    

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18. Corporate formation
    articles of incorporation
    corporate name
    purpose (“all legal business”)
    duration (usu. perpetual)
    registered office/agent
    incorporators
    

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19. Corporate formation
    • Reserve corporate name with
    Secretary of State
    • File articles with probate judge in
    county of principal place of business
    

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20. Corporate governance
    Owners
    Shareholders
    elect Board of
    Directors
    no management
    rights
    Managers
    Board of Directors
    hire Officers
    Officers
    President, VPs
    CEO, COO, etc.
    

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21. Piercing the corporate veil
    "sham" corporation
    disregards corporate form
    shareholders personally liable
    

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22. Limited Liability Company
    Hybrid of corporation and partnership
    • limited personal liability (like corp.)
    • individual taxation (like partnership) OR
    corporate taxation (like corporation)
    • no annual meeting (like partnership)
    • can be member managed (like
    partnership) or manager managed (like
    corporation)
    • LLC statute forms default rules; can
    vary by agreement (like partnership)
    

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23. LLC Formation
    • Certificate of Formation
    • LLC name
    • purpose (“all legal business”)
    • statement that at least 1 member
    • registered office/agent
    • LLC agreement
    • operating agreement
    

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24. LLC formation
    • Reserve corporate name with
    Secretary of State
    • File certificate of formation with
    probate judge in county of principal
    place of business
    

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