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Differences: Company vs Partnership Legal Structure

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Differences: Company vs Partnership Legal Structure

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Questions and Answers

In a partnership, how is ownership typically handled?

Ownership cannot be transferred at all.

It is transferable with the consent of other partners. (correct)

Ownership can only be transferred with government approval.

It is easily transferable without consent.

What is the relationship between shareholders and directors/officers in a company?

Shareholders elect directors who appoint officers. (correct)

Directors can bind shareholders to contracts without consent.

Directors and officers appoint shareholders.

Shareholders are employees of the company.

Who has the authority to make decisions and enter into contracts on behalf of a company?

Principals

Partners

Directors and officers (correct)

Only the shareholders

Which business entity allows partners to act as both principals and agents?

Partnership Signup and view all the answers

When can partners in a partnership bind the partnership to contracts and obligations?

As long as their actions are within the scope of the partnership's business Signup and view all the answers

What is the typical process for transferring ownership in a partnership?

The partnership agreement dictates the process for transferring ownership. Signup and view all the answers

In a company, who has the power to enter into agreements on behalf of the company?

Directors and officers Signup and view all the answers

What kind of relationship exists between shareholders and directors/officers in a company?

Principal-agent relationship Signup and view all the answers

What role do shareholders play in a company's governance?

They elect the board of directors. Signup and view all the answers

When can a partner in a partnership NOT bind it to contracts?

With explicit authorization from all partners Signup and view all the answers