BLAW 3391 Pleasant Exam 2 Questions With Verified Answers
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Course
Blaw 3391
Institution
Blaw 3391
BLAW 3391 Pleasant Exam 2 Questions With Verified Answers
Entrepreneur
One who initiates and assumes the financial risk of a new business enterprise and undertakes to provide or control its management
Sole Proprietorship
The simplest form of business organization, in which the owner reports...
BLAW 3391 Pleasant Exam 2 Questions With
Verified Answers
Entrepreneur
One who initiates and assumes the financial risk of a new business enterprise and undertakes to
provide or control its management
Sole Proprietorship
The simplest form of business organization, in which the owner reports business income on his or her
personal income tax return and is legally responsible for all debts and obligations incurred by the
business.
Sole Proprietorship in TX
You can establish without filing any legal documents.
1) choose a Business name
2) file an assumed business name w/ County Clerk
3) obtain licenses, permits, and zoning clearance.
4) Obtain an Employee identification # from IRS website
Franchise
Any arrangement in which the owner of a trademark, trade name, or copyright licenses another to
use that trademark, trade name, or copyright in the selling of goods and services (expensive!!!)
Franchisee
One receiving a license to use another's (the franchisor's) trademark, trade name, or copyright in the
selling of goods or services
Franchisor
One licensing another (the franchisee) to use the owners trademark, trade name, or copyright in the
selling of goods or services
Types of Franchises
1) Distributorship- Black Snow Beer Company (licensed to distribute/sell)
2) Chain-Style Business Operation- McDonald's (trade name)
3) Manufacturing or Processing Plant- Pepsi Cola (essential ingredients)
Laws Governing Franchises
1) Federal Regulation Of Franchising
- contract law
- the uuc
-industry specific standards
-the franchise rule
2) Stare Regulation of Franchising
-state Disclosures
-requirements for Termination
-Case EX. Inc v. Volvo.
, More on the FEDERAL REGULATION OF FRANCHISING
• Contract law - the franchise relationship is defined by a contract between franchisor and franchisee
• The UUC - Article 2
• Industry Specific Standards - laws enacted by congress to protect franchisees
• The Franchise Rule - requires franchisers to disclose certain material facts that a franchisee needs to
know
Partnership
An agreement by two or more persons to carry on, as co-owners, a business for profit.
Each partner has Unlimited liability.
Partners together have joint and several liability.
Taxed as a pass through entity.
The Uniform Partnership Act (UPA) (not uniform)
Governs the operation of partnerships in the absence of an expressed agreement.
Does a partnership exist?
1) sharing of profits
2) a joint ownership
3) equal right to be involved in management
Pass-Through Entity (taxed)
A business entity that has no tax liability. The entity's income is passed through to the owners, and
they pay taxes on the income.
Information return
A tax return submitted by a partnership that reports the business's income and losses. The
partnership itself does not pay taxes on the income, but each partners share of the profit (whether
distributed or not) is taxed as individual income to that partner
Articles of Partnership
A written agreement that sets forth each partner's rights and obligations with respect to the
partnership.
Partnership by Estoppel
A partnership imposed by a court when non-partners have held themselves out to be partners, or
have allowed themselves to be held out as partners, and others have detrimentally relied on their
misrepresentations
Charging Order
In Partnership law, an order granted by a court to a judgement creditor that entitles the creditor to
attach a partner's interest in the partnership.
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