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PRL 101 slides, Nov. 19

1247d0fbb1983f2e8070809bb7acd6ef?s=47 Ted Major
November 19, 2015

PRL 101 slides, Nov. 19



Ted Major

November 19, 2015


  1. Business Organizations cc licensed ( BY NC ) flickr photo

    by Thomas Hawk: http://flic.kr/p/9eoP2B
  2. creative commons licensed (BY-ND) flickr photo by Massachusetts Office of

    Travel & Tourism: https://flic.kr/p/ctVJUm In-class assignment
  3. Sole proprietorship • Easy/inexpensive to form • Single taxation •

    Few formalities • Limited capital • Limited lifespan • Unlimited Liabilities • d/b/a
  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
  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
  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?
  7. creative commons licensed (BY-NC-SA) flickr photo by Earl - What

    I Saw 2.0: https://flic.kr/p/4JKDDT
  8. Profit split? Equally, unless specifically agreed otherwise

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

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

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

  12. cc licensed ( BY SD ) flickr photo by Derek

    Keats: http://flic.kr/p/8SgDT
  13. cc licensed ( BY NC ) flickr photo by Shira

    Golding: http://flic.kr/p/6GMmTe
  14. Liability for loan?

  15. cc licensed ( BY NC ND ) flickr photo by

    Matthew Niemi: http://flic.kr/p/KC3LA
  16. Corporations Benefits • limited liability • increased availability of capital

    (from multiple shareholders) • perpetual duration
  17. Corporations Disadvantages • increased formalities • must hire attorney &

    file w/ secretary of state to form • Business Privilege Tax • double taxation*
  18. Corporate formation articles of incorporation corporate name purpose (“all legal

    business”) duration (usu. perpetual) registered office/agent incorporators
  19. Corporate formation • Reserve corporate name with Secretary of State

    • File articles with probate judge in county of principal place of business
  20. Corporate governance Owners Shareholders elect Board of Directors no management

    rights Managers Board of Directors hire Officers Officers President, VPs CEO, COO, etc.
  21. Piercing the corporate veil "sham" corporation disregards corporate form shareholders

    personally liable
  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)
  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
  24. LLC formation • Reserve corporate name with Secretary of State

    • File certificate of formation with probate judge in county of principal place of business