Term
What is a Sole Proprietorship?
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Definition
One person owned business, in which the business ends when the owner dies, unless it is sold to a new owner.
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Term
What is a Partnership?
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Definition
Business owned by multiple individuals, and the business can end when a partner dies.
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Term
What is a Limited Liability Company?
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Definition
Registration Required with the Secretary of State
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It is easily completed in a form called a certificate of formation.
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The profits flow through the company to you, so that you don't have corporate and then income tax.
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Formation is Cheap and Dissolution is Cheap
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You must reserve your name.
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You should have an operation agreement with your members, this agreement is not filed with the state, and determines if the company is managed by the members or an appointed manager.
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LLC's like to have S-Corporation taxation, and don't require the formalities of a corporation.
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Term
What is a Nonprofit Corporation?
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Definition
Registration Required
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501 (c) (3) Closed Organization
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Any organization with members can be a 501 (c)
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Has a ton of rules, and the IRS is all over them.
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Must provide a service to the public
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Owner needs fair pay as determined by the IRS
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Must avoid conflict of interests with members of the board and the people who run it
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Money made from an enterprise is not directly related to the mission.
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If you close up shop, you must give all the remaining money to another nonprofit of the same vain.
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Term
What is a For-Profit Corporation?
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Definition
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Term
What is a L3C company?
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Definition
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Term
Sole Proprietorship and Partnership, do or do not require registration?
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Definition
Do not require registration
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Term
What is a Domestic Business?
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Definition
In-state business
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Term
What is a Foreign Business?
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Definition
Business ran in one state, but registered in another.
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Term
What is an Alien Business?
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Definition
Business ran in a foreign country, but present in a US state.
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Term
Sole proprietors and Partnerships are what for their business?
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Definition
Personally liable
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Term
Business entities are state entities, so they register with who?
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Definition
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Term
What is the tax on a sole proprietor ship or partnership?
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Definition
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Term
It is easier to have a sole proprietorship if your business does what?
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Definition
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Term
Why would a Sole proprietorship or Partnership get Umbrella insurance?
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Definition
It covers liability for everything else, that contractors insurance doesn't cover.
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Term
What are some downsides of a sole proprietorship?
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Definition
1.) You enter a higher income tax bracket
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2.) IRS pays more attention to your taxes
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3.)Raising money is limited
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4.)Can't sell stocks
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5.)Ability to sell business is limited
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6.)You can't franchise
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7.)You lack investments
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Term
What are some downsides of partnerships?
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Definition
1.)Unless there is a written agreement, a partner can make decisions, without the other partner.
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2.) You have to split profits and debt.
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3.) If your debtors cannot get a hold your partner, they will take all the money from you.
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Term
Courts always like to try to get both parties to where?
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Definition
Where they started
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Term
What is a limited liability partnership?
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Definition
All partners are protected
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Term
What are limited partnerships?
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Definition
Major partners are protected, but silent partners are not protected.
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Term
What is willful blindness?
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Definition
When you knew or should have known, something, but you decided to stay ignorant.
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Term
Courts can do what if a sole proprietor works with an individual?
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Definition
Imply a partnership, especially if the individual has helped to pay off debt.
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Term
How do you start a partnership?
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Definition
1.) With a partnership agreement (registration optional)
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2.)The agreement can be written, oral, expressed, or even applied.
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Term
Where did everyone use to register their businesses?
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Definition
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Term
What is Partnership by Estoppel?
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Definition
When someone who is not a partner but represents to a third party that there is in fact a partnership.
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Term
What is the term for taking liability for a company due to one being in-distinguished from their company?
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Definition
Piercing the corporate veil
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Term
What are established in corporation by-laws?
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Definition
Form and structure
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Voting
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Ownership
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Indemnity
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Term
What do the articles of incorporation establish?
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Definition
Accounting
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Board Members
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Set initial management
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Term
Who must records be open to?
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Definition
The State
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Shareholders
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