Exam 40: Types of Business Organizations

An unincorporated association (UA) possess all of the following characteristics, except: _______.

A corporation is a separate legal entity capable of owning property, contracting, and being sued in its own name.

The relationship between the franchisor and the franchisee is ordinarily an arm's-length employment relationship.

Most courts hold that joint ventures are subject to the same principles of law as corporations.

Arnold was the sole shareholder, president, and chief executive officer of Algernon Enterprises, Inc. Acting on behalf of Algernon, Arnold negotiated the credit purchase of inventory from Amax. The contract was signed in the name of Algernon Enterprises. Algernon never paid the sums due on the contract, and Arnold and the corporation were sued. Is Arnold personally liable to Amax?

To meet the requirements of the FTC, the franchisee must make a minimum payment of at least $540 during the first six months of operations.

A joint venture typically relates to the carrying out of a single enterprise or transaction.

A joint venture manufacturing agreement gives the manufacturer authority to manufacture products under a proprietary trademark.

An owner's death would have no effect on any of the business entities below, except: ______.

A parents' group in a small town formed an association to run a little league baseball team. Tom and Mary were members of the association, which was never incorporated. Tom was elected president of the association and ordered some uniforms for the team. When the uniforms were not paid for, the baseball supply company sued Tom and Mary for the contract price. Regarding the liability of Mary: ______.

To protect themselves against liability, franchisors often require individual franchisees to: ______.

The process of incorporation involves the expenditure of funds for organizational expenses.

The FRC has adopted a franchise disclosure rule that requires franchisors to give prospective franchisees a full disclosure statement thirty (30) days before a franchisee signs a contract or pays any money for a franchise.