LAW 122 Study Guide - Midterm Guide: Limited Liability Partnership, Sole Proprietorship, Corporate Social Responsibility

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Types of business organizations: sole proprietorships, general partnerships, limited partnerships, limited liability partnerships (llp, corporations. Liability and benefits of entrepreneurs and other stakeholders differ depending on type used. Allocating risk: owners, employees, creditors, consumers. Governance: owners/shareholders, managers/executives, company rights, stakeholders. Arises once a person begins to conduct business: e. g sta(cid:396)t (cid:272)utti(cid:374)g so(cid:373)eo(cid:374)e(cid:859)s la(cid:449)(cid:374) fo(cid:396) (cid:373)o(cid:374)ey. Advantages: simple to start, simple to administer, possible tax advantages. Class 5-chapter 21: unlimited personal liability, can only raise money personal borrowing, as business grows, these problems continue to grow. Conclusion: a sole proprietor is best suited for small businesses. No fo(cid:396)(cid:373)al (cid:396)egist(cid:396)atio(cid:374) as a (cid:862)sole p(cid:396)op(cid:396)ieto(cid:396)ship(cid:863) is (cid:396)e(cid:395)ui(cid:396)ed. (cid:894)(cid:272)o(cid:373)pa(cid:396)e this to incorporation, where formal steps are required. ) Three main types of partnerships: pa(cid:396)t(cid:374)e(cid:396)ship (cid:894)so(cid:373)eti(cid:373)es (cid:272)alled (cid:862)ge(cid:374)e(cid:396)al pa(cid:396)t(cid:374)e(cid:396)ship(cid:863)(cid:895, li(cid:373)ited lia(cid:271)ility pa(cid:396)t(cid:374)e(cid:396)ship (cid:894)o(cid:396) (cid:862)llp(cid:863)(cid:895, limited partnership. Legal test: exists when: two or more people, carry on business together, with a view to profit. There are no formal requirements for creating a partnership.