Sole Proprietorships and Franchises What happens when a sole proprietorship is sold, or transferred? Understand the sole proprietorship as a business entity and how it's formed as well as its advantages and disadvantages; also understand franchises (they typically involve the licensing of intellectual property (ex: trademark) for commercial use by a franchisee). Know the different types of franchises (chain-style, distributorship, manufacturing) and understand what the laws governing franchises generally seek to accomplish Partnerships, LLC's, etc. To what extent is a newly admitted partner responsible for preexisting debts (ie: debts incurred before admission into the partnership)? To what extent are members of an LLC liable for the debts of the LLC? Understand partner dissociation and partnership dissolution, rights of partners When a partnership is dissolved, what is the priority of payment between partners and creditors of the partnership? Know the differences in taxation between a corporation and a partnership, and study how an LLC approaches taxation LLC formation Study how losses and profits are shared among partners Partnership property vs. personal property of the individual partners used in the course of conducting partnership business rights with regard to sale Understand how a limited partner in a limited partnership can lose her privilege of limited liability Corporations, Officers, Directors & Shareholders How is a corporation formed? (selection of state to incorporate, first organizational meeting, adoption of bylaws, selection of directors, etc. know the order of the process), also know shareholder's derivative lawsuits, business judgment rule and piercing the corporate veil What is a quorum and, in most cases, what is the quorum requirement for Board of Directors meetings and shareholders meetings? Understand what a resolution of the Board is. What percentage of directors must vote in favor of typical measures in order for them to pass (ex: declaration of a dividend)? Understand election procedures of the Board of Directors, and how the officers are appointed Understand what it means for a common shareholder to be last in terms of priority (residual position in corporate structure) when it comes to getting paid upon dissolution of the corporation relative to preferred stockholders and holders of debt instruments (i.e. bonds) Know the differences between stocks and bonds. What are preemptive rights? When are they available? What does it mean for directors to be elected by cumulative voting, and why would it be used?