10 Questions
In a partnership, how is ownership typically handled?
It is transferable with the consent of other partners.
What is the relationship between shareholders and directors/officers in a company?
Shareholders elect directors who appoint officers.
Who has the authority to make decisions and enter into contracts on behalf of a company?
Directors and officers
Which business entity allows partners to act as both principals and agents?
Partnership
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
What is the typical process for transferring ownership in a partnership?
The partnership agreement dictates the process for transferring ownership.
In a company, who has the power to enter into agreements on behalf of the company?
Directors and officers
What kind of relationship exists between shareholders and directors/officers in a company?
Principal-agent relationship
What role do shareholders play in a company's governance?
They elect the board of directors.
When can a partner in a partnership NOT bind it to contracts?
With explicit authorization from all partners
Explore the distinctions between a company and a partnership in terms of legal structure, ownership, management, and liability protection. Understand the characteristics that define these two business entities.
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