Business Unit 3 Exam Study Guide Chapter 27

University:
University of California, Berkeley
Course:
UGBA 10X | Foundations of Business
Academic year:

2021
Views:

290

Pages:

2
Author:

Shyanne Johnson

Unit 3 Exam Study Guide Chapter 27  Who are the principals of a business? The owners of a business entity, entitled to what % they own  What is a sole proprietorship? One-person business entity with minimal filing requirements  What certificate must a sole proprietor file with a local or state office to use a trade name for the business rather than the sole proprietor’s actual name? They must fill a DBA, “doing business as”  What is the rule regarding a sole proprietor's personal liability for the debts and liabilities of the sole proprietorship? All debts and liabilities of the business are also personal debts and liabilities for the principal  What are the types of debt through which a sole proprietorship may be capitalized, and how do they differ from each other? 1. 2. 3. 4.  Private Loan from an individual (family/friends) Commercial Loan (bank) Line of Credit (pay interest on amount used) Unsecure Credit (credit card) What is collateral? Assets the borrower has pledged to secure a loan  What are the taxation requirements for a sole proprietorship? No corporate income tax or tax return, principal reports business income on their personal tax return and pays based on their own individual tax rate  In general, what are the two ways by which a sole proprietorship is terminated? 1. Express act of the principal 2. Operation of law  What is the rule regarding passage of a sole proprietor’s ownership interest in the sole 1 proprietorship to the sole proprietor’s heirs through a gift or an estate? The proprietor’s ownership interest in a sole proprietorship cannot pass to their heirs through gift or estate. SEE SUCCESSOR LIABILITY  What is a franchise? Centers on contractual relationship rather than a business entity. Commercial relationship for the right to operate a business to the franchisor’s trade name or sell branded goods  Which federal regulatory authority oversees the regulation of franchisors? The Federal Trade Commission (FTC)  How did the Court of Appeals for the Fourth Circuit rule in Biller v. Snug Harbor Jazz Bistro of Louisiana, LLC (2012)? Affirmed decision in favor of Snug Harbor, the entity owned by Brumont terminated when he died because it was sole proprietorship, Snug Harbor LLC is a different thing entirely 2