Essentials of Business Law Chapter 20

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  1. Sole proprietorship
    A business owned and operated by one person.
  2. Unlimited liability
    Legal exposure in which an owner of a business is personally liable for all of the debts and obligations of the business.
  3. Partnership
    A business owned and operated by two or more persons.
  4. Winding-up period
    The time after dissolution of a partnership during which there is an orderly liquidation of the partnership assets.
  5. Joint venture
    An activity in which individuals become partners for only a short period of time or for only a single project.
  6. Joint and several liability
    Legal exposure such that a person with a claim against a general partnership can elect to sue either all of the partners together or any individual partner whom he or she chooses.
  7. Limited partnership
    A business in which there are one or more general partners and one or more limited partners.
  8. Limited liability
    Legal exposure in which an owner of a business is not personally liable for all of the debt and obligations of the business.
  9. Corporation
    A business formed as a separate legal entity.
  10. Articles of incorporation
    A document that lists the general powers of a corporation.
  11. Bylaws
    A document that provides rules for the meetings of a corporation.
  12. Quorum
    The minimum number of shares necessary to present at a corporate meeting in order for action to be taken.
  13. Subchapter S corporation
    A corporation that is taxed as a partnership.
  14. Proxy
    A legal document that transfers the right to vote in a corporate election to another person.
  15. Fiduciary responsiblity
    A legal requirement that a person will exercise his or her authority while working under a duty of loyalty and a duty of care.
  16. Duty of loyalty
    A legal and ethical obligation placed upon a director to administer to the affairs of the corporation which personal integrity, honesty, and candor.
  17. Duty of care
    A legal and ethical obligation placed upon a director to act diligently and prudently in conducting the affairs of the corporation.
  18. Limited liability company (LLC)
    A relatively new organizational form available in most states that provides all of the owners with limited liability.
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Essentials of Business Law Chapter 20
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Chapter 20
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