COMM 341: Business types

From BluWiki

(NOTE: All corporations are the SAME in US)

• UK:
  • LTD (Private corp)
  • PLC (Public limited corp)
• Germany:
  • A.G. (Publically traded corp)
  • GmbH (NOT a corp, but better - for private)
• France:
  • S.A. (public corp)
  • No private corp, but something better.

Sole proprietorship

• Defination:
  • The sole proprietor is the owner of the business
• Ownership:
  • The sole proprietor owns EVERYTHING in the business
• Control:
  • Sole proprietor
• Principal / employer
  • Sole proprietor
• Agents / employees
  • Grundouns, anyone who works under you is an employee
• Formation
  • Nothing to do.

Corporation

• Defination:
  • The corporation is a legally recognized artificial person, seperate and distinct from the other persons who own it and who manage its business.
  • Force yourself to use it whenever referring to a corporation.
• Ownership:
  • Stockholders own it. It owns the business.
  • The corporation itself is the OWNLY owner of the business (Double taxation, IT pays taxes; and the stockholders pay taxes!!).
• Control:
  • Board of directors ultimatly control the business. Injunction is impossible against the board, stockholders can never tell them what to do.
• Principal / employer
  • IT (the corporation). The liability falls on IT.
• Agennts / employees
  • Officers and all who work under the offices.
• Formation
  • Will do this later.

Corporate shield

"It" - the corporation takes the vicarious liability

• Vicarious tort: Yes (owner is NOT vicariously liable)
• Direct tort: absolutly not.
• Contract
  • Yes - when contracts don't specify a surety
  • But usually contracts always specify a SUREITY (a major stockholder) so in these cases it's a big NO

Worker's comp exclusivity bar

• Board of directors, the corporation, and the employees are all protected
• You couldn't sue and win against any of these under any tort because workers compensation is an affirmative defense

Dividing risk through multiple corporations

You can start multiple corporations under the same name, to fulfill different services / products.

• Note: even corporations can start other corporations. These other corporations are called SUBSIDARIES

Franchises

The essence of franchise: two corporations share a trade name, and there is no agency or ownership between the franchisor and the franchisee. THE ONLY RELATIONSHIP IS CONTRACTUAL. Therefore there's no liability at all between the two.

• McDonalds corporation - franchisor, T/A McDonald's

Partnership

• Defination:
• Ownership:
  • The partners, as agreed
• Control:
  • The partners, as agreed
• Principal / employer
  • The partners, joint and several
• Agennts / employees
  • Partners, grundouns
• Formation
  • Partnership agreement expressed or implied