Slide 1IntroductionSole ProprietorshipsSole ProprietorshipsSole ProprietorshipFranchisesFranchisesBasic Partnership ConceptsBasic Partnership ConceptsBasic Partnership ConceptsPartnership FormationPartnership FormationPartnership OperationPartnership OperationPartnership OperationPartnership OperationPartnership OperationPartnership TerminationPartnership TerminationPartnership TerminationPartnership TerminationLimited Liability PartnershipsLimited Liability PartnershipsLimited PartnershipsLimited PartnershipsLimited PartnershipsLimited PartnershipsLimited PartnershipsLimited PartnershipsLimited Liability CompaniesLimited Liability CompaniesLimited Liability CompaniesLimited Liability CompaniesLimited Liability CompaniesLimited Liability CompaniesLLC Operation and ManagementLLC Operation and ManagementLLC Operation and ManagementDissociation and Dissolution of an LLCDissociation and Dissolution of an LLCDissociation and Dissolution of an LLCDissociation and Dissolution of an LLC© 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.© 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.Business Law Today 10th Ed.Text and Summarized CasesDiverse, Ethical, Online and Global EnvironmentRoger LeRoy MillerGaylord JentzChapter 26 Sole Proprietorships and Private Franchises(JustASC/Shutterstock.com© 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.INTRODUCTION •When choosing a business entity, entrepreneurs should consider:–Ease of creation.–Owners’ liability.–Tax considerations.–Need for Capital.2© 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.SOLE PROPRIETORSHIPS•The owner is the business.•Anyone who does business without creating a separate business organization has a sole proprietorship. 3© 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.Advantages DisadvantagesOwner is in complete control & receives all profitsOwner is personally liable for all torts/contractsFlexibility Lacks continuity after deathEase of creation; maintenance Difficult to raise financingSOLE PROPRIETORSHIPS4© 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.SOLE PROPRIETORSHIP•Major disadvantage is that the owner is personally liable for all losses or liabilities incurred by the business enterprise. 5© 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.FRANCHISES•Franchise. An arrangement in which the Franchisor (owner of trademark, trade name or copyright) licenses Franchisee to use the trade mark, trade name or copyright in the sale of goods or services. 6© 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.FRANCHISES•Types of Franchises:–Distributorship.–Chain Style Business Operation.–Manufacturing or Processing Arrangement.7© 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.BASIC PARTNERSHIP CONCEPTS8•Agency Concepts and Partnership Law:Partnerships are governed both by common law and by statutory laws.Each partner is deemed to be an agent and fiduciary of the other.There may be imputation of liability.© 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.BASIC PARTNERSHIP CONCEPTS9•Uniform Partnership Act. In the absence of a partnership agreement, the Uniform Partnership Act, as adopted by most states, governs the partnership. © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.BASIC PARTNERSHIP CONCEPTS10•Definition of a Partnership. A Partnership is created when two or more persons (including corporations) agree to carry on business for profit as co-owners with equal right to manage and share profits (UPA).© 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.PARTNERSHIP FORMATION•The Partnership Agreement can be written or oral, unless the Statute of Frauds requires a written agreement. 11© 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.PARTNERSHIP