Legal Aspects of Business Organizations in Tourism and Hospitality Quiz

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5 Questions

What is a corporation?

A legal entity created by law with the right of succession

What are the essential attributes of a corporation?

Right of succession and authorized powers

How does a partnership differ from a corporation?

Partnerships have unlimited liability, while corporations have limited liability

What is the legal dissolution of a partnership?

Liquidation of assets and settlement of liabilities

What is the main purpose of the module mentioned in the text?

To discuss different types of business organizations and their governing laws

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.

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.

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