Legal Aspects of Business Organizations in Tourism and Hospitality Quiz

Study Notes

Corporation Overview

A corporation is a separate legal entity that provides limited liability to its owners, also known as shareholders.
It is considered a legal person, with its own rights and obligations.

Essential Attributes of a Corporation

Separate legal entity: A corporation exists independently of its owners.
Limited liability: Shareholders' personal assets are protected from the corporation's debts and liabilities.
Centralized management: A corporation is managed by a board of directors and officers.
Continuous existence: A corporation continues to exist even if its owners change.
Free transferability of ownership: Shares can be easily transferred from one owner to another.

Partnership vs Corporation

A partnership is a business owned and operated by two or more individuals, whereas a corporation is a separate legal entity.
In a partnership, owners (partners) have unlimited personal liability, whereas in a corporation, shareholders have limited liability.

Dissolution of a Partnership

The legal dissolution of a partnership occurs when the partnership is terminated, and its assets are distributed among the partners.
This can happen due to various reasons, including the death or withdrawal of a partner, or the expiration of the partnership agreement.

Module Purpose

The main purpose of this module is to introduce the concept of corporations and partnerships, highlighting their key characteristics, advantages, and differences.

Description

This quiz covers the legal aspects of business organizations in the tourism and hospitality industry. Topics include the scope and essential attributes of corporations, the differences between partnership and corporation, and the legal dissolution of partnerships. Ideal for 2nd-year learners seeking to understand the legal framework of business in this sector.