The Legal Environment of Business
Week Four Chapter Questions
17-3. Daniel is not liable for the debt Rubya defaulted on. The contract did not make Rubya a partner, even those she was given profit sharing and management responsibilities, she did not poses any ownership of the business. Also under UPA 202(c)(3) no presumption of partnership is made since the profits are wages of an employee or for the services of an independent contractor. Not to mention Daniel did not have any knowledge of the credit extended to Rubya. 17-4. The relationship between sole proprietor and sole proprietorship is that the sole proprietor assumes complete ownership of the sole proprietorship. The owner is the business. The proprietor reports income as personal income, is personally liable for all debts, and has unlimited liable for all obligations of the proprietorship. Property of the proprietorship is essential an extension of the proprietor. With that said the courts may find that the proprietor had intentions of selling the bike making it proprietorship property, making it covered under Ferguson’s insurance. 19-1. Incorporating as a limited liability corporation has its advantages of protecting the shareholders more so than a partnership. Also if they were to create an S corporation they would be able to avoid being double taxed. Income would pass through shareholders like a partnership, paying personal income taxes on it. 20-1. No there was never a contract between Wade representing Gett for the purchase of the coin, because even though Gett is interested in purchasing coin Wade acted on his own in representing Gett. There was never ratification between Gett and Wade. Therefore Wade was never an agent for Gett. 20-5. Knutson an agent of Dennegar, who was given the authority to manage the house hold’s financials as well as the mail. Knutson also had the authority to sign Dennegar’s checks. Under implied authority, Dennegar is liable to New Century Financial...
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