Tuesday the 6th 1115
Types of businesses
· Sole Proprietorship- the most used, around 75% of businesses
· Partnerships- A voluntary agreement entered into by two or more parties to engage in business and to share any attendant profits and losses
· Corporations- A distinct legal entity characterized by continuous existence; free alienability of interests held therin; centralized management and limited liability on the part of the shareholders of the corporation. about 20% of business, account for 90 % of receipts, big business
· LLC-Limited Liability Company- hybrid between the partnership and corporation, small business
Important business forms
· Formalities-do you have do anything to start business
o No formalities in sole proprietorship or partnership
o Formalities for forming a corporation and LLC
· ownership and control
o No separation between sole proprietorship, partnership and LLC
o Separation between Corporation
· Legal person
· duration
o Sole proprietorship ends when you die
o Corporation doesn’t matter who owns the stop. Duration is perpetual
· Transferability
· liability- is liability limited or unlimited.
o In sole proprietorship and partnership you have unlimited liability.
o As a partner you are responsible for mistakes of your partners
· tax benefits
o Pass through under sole proprietorship and partner
festation of consent by one person to another that the other shall act on his behalf and subject to his control, and consent by the others so to act (2) the one for whom action is to be taken is the principal. (3) the one who is to act is the agent
· Don’t need business, compensation or contract to have an agency relationship
Three forms of agency
· (1) principal/agent
· (2) master/ servant
· (3) employer/independent contractor
Gordon v. Doty. Where one undertakes to transact some business or manage some affair for another by authority and on account of the latter, the relationship of principal and agent arises. Gorton, a minor, was a member of his high school’s football team which was scheduled to play a game at another high school. Garst was the football coach. Doty knew of the game and volunteered her car for use in transporting the team and allowed Garst to drive it. Garst was in an accident that Gorton was injured in the accident and his father sued Doty arguing that she was liable as the principal.
A. Gay. Jenson Farms Co. v. Cargill A creditor who assumes control of his debtor’s business may be held liable as principal for the acts of the debtor in connection with the business. Warren Grain & Seed operated a seed elevator and purchased grain
