EXAM 2

This is a person who forms and operates a business. An entrepreneur may start a business by himself or herself or may cofound a business with others

Entrepreneurs can choose between 6 different forms of conducting business 

All of these forms of business have their disadvantages and advantages that an entrepreneur must factor before creating a business.

This is form of business:
1. Is the most common
2. The simplest 
3. Only has ONE OWNER

Under this form of business the owner is the actual Business the business in not a separate legal entity.

There are no formalities, and no federal or state government approval required.

1. Forming a Sole Proprietorship is easy and does not cost a lot.
2. The owner has the right to make all management decision concering the business, including those involving hiring and firing employees.
3. The sole proprietor (the Owner) owns all of the business and has the right to receive all of the business profits. 
4. A sole proprietorship can be easily transformed or sold if and when the owner desires NO OTHER APPROVAL IS NECESSARY.

A sole proprietor’s access to the capital is limited to personal funds plus any loans he or she can obtain, and a sole proprietor is legally responsible for the business’s contracts and the torts he or she or any of his or her employees commit in the course of employment.

The personal liability of a sole proprietor for all the debts and obligations of a sole proprietorship obligations of a sole proprietorship.

Creditors may recover claims against the business from the sole proprietors' personal asset (home, automobile, bank accounts)

Under this form of business organization the business is not a legal entity so it does not pay taxes at the business level. 

Therefore the earning and losses of the business are claimed on the owners Tax return.

A business must meet four criteria to qualify as a general partnership under the UPA

A model act that codifies partnership law. Most states have adopted the this act in a whole or in part.

Persons liable for the debts and obligations of the general partnership

A written agreement that partners sign to form a general partnership.

It is not mandatory but is a good thing to have in writing incase of a dispute. If an agreement fails to provide for an essential term or contingency, the provisions of the UPA apply. Thus, the UPA acts as a gap-filling device to the partners’ agreement.