最新Module38-Businessstructure(Sole,Partnership,LLC)名师精编资料汇编

1、Module 38 Business Structure (About 20% of the BEC exam)Sole ProprietorshipsPartnershipgeneral partnership一般合伙新的加入者对以前的负债最多承担以其资产为限的责任Limited PartnershipsJoint VenturesLLC 变种，杂交LLPCorporation和C SSole Proprietorships (For the exam, it is lightly tested0A sole proprietorship is the simplest form of bu

2、siness ownership. A sole proprietorship is a business owned by one person. The owner may operate on his or her own or may employ others.1) Advantages:Informality无限责任，债权人有权向我个人的资产追溯Nothing need be filed with the state in which the business operates (unless the state or city requires a business licens

3、e). If a fictitious business name is used, then many states require publishing the true name of the business owner.Personal LiabilityThe sole proprietor of the business has personal liability of the debts incurred by the business.Life of the entityA sole proprietorship cannot exist beyond the life o

4、f the sole proprietor.Taxcorporation是taxable，公司盈利要征税，派发出去的股利也要征税的。双重多重For tax purposes, profits and losses from the business flow through the business to the sole proprietor.Think about the Schedule C (self-employment) in the 1040 form in the REG exam.BankruptcyA sole proprietorship is not considere

5、d an entity separate from the sole proprietor; therefore, a sole proprietor would have to file for bankruptcy personally under the Bankruptcy Code.Taking all profitsA sole proprietor one takes all the profits of the business and a sole proprietor usually has a quick decision process and doesn't

6、have any opposition when making a decision as he or she has total control of his or her business. All profits and losses accrue to the owner.2) DisadvantagesA business organized as a sole trader will likely have a hard time raising capital since it has to make up for all the business's funds. Th

7、e owner of the business has unlimited liability as he is responsible for the business's debts because he has control over the business.A disadvantage of a sole proprietorship is that as a business becomes successful, the risks accompanying the business tend to grow.Partnership (Main Focus of thi

8、s module)A partnership is a form of business in which two or more people operate for the common goal which is often making profit. Nonprofit associations such as charitable organizations, labor unions or clubs do not qulify.There are three typical classifications of partnerships: 1) general partners

9、hips, 2)limited partnerships, and 3) limited liability partnerships.For the CPA exam, you do need to know the characteristics, differences and similarities of the above three types partnerships1) General PartnershipPartnerships have certain default characteristics relating to both (a) the relationsh

10、ip between the individual partners and (b) the relationship between the partnership and the outside world.A.Common Characteristics apparent 从善意第三方认为principal被代理人，agent 代理人（ actualreasonable ,good faith 房产经纪100 万 )告诉 express,imply,第三方Partners are the Agent of the partnership (think about the principa

11、l and agent law in the REG, especially the actual authority, apparent authority and unauthorized action (ratification)Created informally and very easy to form也是无限责任The assets of the business are owned on behalf of the other partnersUnlimited liability of partners for partnership debts: the partners

12、are each personally liable(unlimited liability),jointly and severally , for business debts, taxes or tort liability. If a is bankrupt, canto the b and c.Limited duration: By default a partnership will terminate upon the death, disability, or even withdrawal of any one partner. 有目的而存在的Transfer of own

13、ership requires agreement: Unless otherwise provided in the partnership agreement, no one can become a member of the partnership without the consent of all partners, though a partner may assign his share of the profits and losses and right to receive distributions ("transferable interest")

14、. 允许新的合伙人你要现在的同意Under RUPA (Revised Uniform Partnership Act), the partnership is separate legal entity and can sue or be sued.Partnership is a pass-through entity and is not taxable (Think about the tax form 1065 and scheduleK-1 in regulation)在 partnership层面上是不征税的，1065 是为了 information purpose,给每个 pa

15、rtner 一张 K1 ，把 partner 的收入填写到schedule E，再到 1040根据这个B.Formation of PartnershipThe formation of the partnership can result from an agreement that isWritten or oral: Written partnership agreement is not required unless within Statute of Frauds反欺诈的条例 (MYLEGS要书面的合同的打官司，原告才可能赢的，m-marriage 成立的前提是和我女儿结婚，要写下

16、来的，Y ，成立 partnership 的目的任务要过1 年才能完成的，lend 等不动产， except 遗产继承人guarantee, refer to REG)Implied: Whenever two or more persons are sharing profits from a venture, they are assumed to bepartners unless they can prove otherwise (a person proves they re not a partner by showing they do notuse partnership pr

17、operty and do not participate in the management of the business). This is known as partnership by rebuttable presumption. 因为本身的成立形式比较 informNo governmental approval is necessary for the formation of the partnership (informal), and there are no special filings required either. A partnership that wish

18、es to have a business name with other information may need to file a fictitious name statement with the appropriate government agency. 怪名字才告诉The partner s capital may not only be in cash, property or services already performed, but also may be in the form of promises to give or perform these at a fu

19、ture date. 投入各种都可以， all of aboveC. Basic Partner Rights 合伙人的权益Partnership interests (profits)利润分配By default, profits are shared equally amongst the partners. However, a partnership agreement will almost invariably expressly provide for the manner in which profits and losses are to be shared. This is

20、 known as the partnership interest. The right is personal and transferable without the need for approval by the other partners. In that case, the transferee (such as a personal creditor to the transferring partner) isentitled to receive the partner s share of ver,profithes.Howetransferee (or the ass

21、ignee) is not considered the partner of the partnership. The transferor (or the assignor) is still the partner. So the transferee will not be entitled to the rights as discussed below. 分配利润的权利是可以转移的，不用他人同意，仅限 interest 下面的 2 个权利是不可以转移的Profits and losses are shared equally by number of partners unless

22、 agreement specifies otherwise even if contributed capital is not equal. If partners agree on unequal profit sharing but not on loss sharing, the losses are shared per the profit-sharing proportions. 平均分即使投入是不同的，除非例外规定，limited partnership是按照投资比例算Partnership property是不可以转移的Under RUPA, all partnership

23、 property include (1) all property acquired by the partnership, (2) Property purchased by a partner with partnership funds or (3) property acquired by the partner in his capacity as a partner (Remember: partner is the agent to the partnership)This right is not transferrable , so a personal creditor

24、of a partner cannot obtain a right to any specific partnership property as a result of an assignment of interest by that partner. Same applies to heirs or theestate of the partners upon partner s death.Partnership participation (management rights-vote/make contracts/debts)Each partner has a right to

25、 participate equally in the management of the business, and act as an agent for the partnership. The partners also has right to inspect books and make contracts and vote on partnership actions. This right is not transferable.D. Fiduciary duties of partnersEach partner owes a fiduciary duty to each o

26、ther and must act in best interest of others. So the partner owes(1) the duty of loyalty, and(2) duty of care (not be grossly negligent, intentional misconduct or knowingly violate the law).The partner refrains from competing with the partnership and the partners must also act in good faith and fair

27、 dealing in the discharge of all their duties.E. Relationship with Third Party (Agency authority rules applies)If you recall the agency law discussed in the REG, the following are the authority an agent has:Actual authority:The principal give the agent the power to contract(1)Express- Principal expl

28、icitly states the agent s authority(2) Implied: Principal assigns tasks, which requires authority to carry out duties. Reasonable and necessary to get job done.Apparent authority- A good-faith 3 principal creates such impression.rd party reasonably assumes the agent has authority as theUnauthorized

29、action- not liable unless ratifyRatification- Principal give the agent authority after contract is made but the principal must be fully disclosed, the principal must know the details of the contract made by the agent on behalf of partnership and the principal must ratify before 3 rd party withdraws.

30、Similarly, the right of a partner to participate in management includes broad agency authority. The partners, in fact, are mutual agents and principals with the power to make contracts binding each other. The actual authority of the partner is based on agreement, but a partner has the apparent autho

31、rity to make virtually any contract that involves the business of the partnership with the exception of the following which requiring unanimous consent:Admitting a new partnerGuaranteeing the debts of a third party (surety)-remember MYLEGS? Surety agreement need to be individually signed by the part

32、ner who is going to act as the suretyAdmitting or submitting a legal claim in court or to the arbitration: No partner may waive the legal rights of the other partners by admitting responsibility in court or by agreeing to submit disputes with others to biding arbitration without all partners consent

33、ing to the arragnement.In order to amend the partnership agreementNot within the business scope of the partnership businessSale/pledge/ assignment of partnership property (sell goodwill not ok but sell inventories in ordinary course of business is OK)-The sale of property or pledging as collateral f

34、or a loan requires consent of all partners.Third parties are aware of a limit to the partner s actual authority: Apparent authority does not apply when the partners agree to limits on the actual authority of a partner and notify thirdparties of the limit.F. Admitting or Retiring a partnerAdmission o

35、f new partnerIt is common to have a new partner admitted when an old partner retires. An incoming partner is not personally liable for debts incurred by the partnership before he became a partner, but any financial contribution the incoming partner made to partnership property may be used to satisfy

36、 old debts. Of course, an incoming partner is personally liable for all debts incurred by the partnership after he becomes partner.Retirement of a partnerWhen existing partner retires, the partner will continue to be liable for debts created before retirement unless the creditors agree to perform a

37、novation to release the retiree. An agreement by other parters to hold the retiring partner harmless for all debts will not release the liability, since the debts are not owedto the other partners. Such internal agreement is only an indemnification agreement requiring the remaining partners to reimb

38、urse the retiree for any amounts they are forced to pay creditors.In addition, the retiree may continue to be liable for debts created after retirement ifA retiring partner may be liable for debts created after the retirement ifproper notice of retirementisn t given to release the apparent authority

39、.However, a retiring partner can limit his liability by giving (1)actual notice - third parties are directlyinformed or (2)constructive notice- an announcement of the termination is made in publications thatthird parties are likely to read (public notice). Notice is not requiredin case of death of t

40、he partner asthe termination of the partner s participation in this case is by operation of law.So the retiring partner also has the ability to make contracts that are binding on the remaining partners if proper notice of retirement hasn t been made.G. LiabilitiesEach partner is jointly and severall

41、y liable for all partnership obligations (whether arising from tort or contract) incurred within the scope of partnership business.Liabilities arising from contracts & debts (voluntary): If the partnership breaches a contract, the third party must attempt to recover damages out of partnership as

42、sets first, then may access to the personal assets of the partners for remaining amounts owed. If one partner is personally bankrupty, the third party may access sufficient assets of the solvent partners to satisfy the claimLiabilities arising from torts (involuntary) within the course of the partnership business. A tord is a wrongful act, whether intentional or negligent, not arising out of contractual obligations that causes an injury and