B LAW 210 1st Edition Lecture 14 Outline of Last Lecture I Business Entities Part 2 a Corporations b Limited Liability Corporations Outline of Current Lecture II Business Entities Part 3 a Other Forms of Entities b Extra Information Current Lecture Other Forms of Entities o Joint Ventures A general partnership for a limited time and purpose build a building rent it out and sell it o Cooperatives Association of individuals organized to provide an economic service to its members buy bulk products to sell cheaper to members o Syndicates A group that finances a project financing the building of a shopping center o Franchises A franchise exists when a franchisee pays a franchisor a franchise fee for the right to sell goods or services according to the franchisor s marketing plan Franchises must be registered under federal and in many cases state law Franchisees 1 Must follow the exact specifications of the franchisor 2 May not legally bind the franchisor Three types of franchises Product distributorships car dealers Trademark licensing NFL Business format McDonald s Extra Information o Failure to file an Annual Report will result in automatic dissolution by the state for corporations and LLCs These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute o Business Judgment Rule protects directors against suits by shareholders when a director makes an honest mistake that negatively affects the corporation o A Corporation s advantages are 1 It shields owners from personal liability 2 It is easier to raise financing The main disadvantage is double taxation o An LLC s advantage is limited liability without double taxation o Upon dissolution creditors always come first limited partners before general partners o Corporations and LLCs can be owned by artificial persons as well as natural persons artificial persons could include corporations and trusts o A Separate Legal Entity SLE or legal entity has an existence apartment from the owners A corporation can sue and be sued A corporate veil can be pierced when corporate formalities are not followed always sign as an agent of the corporation