Name and explain the 3 different types of franchises and give an example for each one.
3. Why might a franchisor want to terminate a franchise? Why might a franchisee want to continue its association with a franchisor?
5. Name the 4 main types of partnership forms discussed in the lesson. For each type of partnership explain the following:(1) how it is formed (2) the liability of the partners (3) the tax treatment of the partners and (4) the distribution of assets upon dissolution of the partnership.
6. Doreen, Louis and Elizabeth form a limited partnership. Doreen is a general partner and Louis and Elizabeth are limited partners. Consider the separate events below and discuss fully whether each event constitutes a dissolution of the limited partnership.
(a) Louis assigns his partnership interest to Ashley
(b) Elizabeth is petitioned into involuntary bankruptcy
(c) Dorinda dies
7. Karl asked Christopher to work with his interior design business, Karl’s Kollections in New Orleans. At the time, they were in a romantic relationship. Christopher was involved in every aspect of the business – bookkeeping, marketing and design – but was not paid a salary. He was reimbursed; however, for expenses charged to his personal credit card , which Karl also used. Christopher took no profits from the firm saying that he wanted “to grow the business” and “build sweat equity”. When Karl and Christopher’s personal relationship soured, Karl fired Christopher. Christopher objected claiming that they were partners. Is Christopher entitled to 50 percent of the profits of Karl’s Kollections? Explain your answer.
8. Sally is an excellent baker. She takes orders from local friends for cakes and cupcakes, but her business has gotten so big that she would like to expand and buy a local store so that she can hire employees and take more large orders. Her bakery name is going to be Sally’s Sweets. What steps does her have to take to form a corporation?
9. TRUE OR FALSE: A foreign corporation is one that is incorporated in a foreign country?
10. Discuss 2 advantages and 2 disadvantages to forming a corporation.
11. TRUE OR FALSE: An S Corporation avoids taxes at the corporate level and shareholders are only taxed at the individual level – just like a partnership.
12. TRUE OR FALSE: A corporation is a legal entity and therefore has the right to freedom of speech.
13. Explain the difference between common stock and preferred stock.
14. John, Sally and Drew form a limited liability company. John contributes 60 percent of the capital and Sally and Drew each contribute 20 percent. Nothing is decided about how profits will be divided. John assumes that he will be entitled to 60 percent of the profits in accordance with his controbution. Sally and Drew however assume that the profits will be divided equally. A dispute over the profits arises and ultimately a court has to decide the issue. What law will the court apply? In most states what will result? How could this dispute have been avoided? Discuss fully.
15. TRUE OR FALSE: When winding up an LLC, member capital contributions are paid out first from the proceeds of the LLC.
16. TRUE OR FALSE: If a member dies or otherwise dissociates from an LLC the other members may continue to carry on LLC business
Type of assignment: Coursework