Jurisprudence IUSD 2023 Correct answers
latest update 2024
Which practice association is the easiest and least expensive to form and why?
The Sole Proprietorship is the simplest form of business organization and, therefore, the least
expensive to maintain. There are normally no formalities required to begin
What is a Certificate of Assumed Business Name and how does it pertain to a dental practice?
A Certificate of assumed business Name is a state form used to identify your business.
Does a sole proprietorship limit the owner's personal liability? Why or why not?
No
All business property and all personal property are subject to the claims of creditors. In other words,
this type of business organization provides no protection to the owner's personal assets.
Why is a sole proprietorship at a disadvantage compared to other associations when raising working
capital?
The SP's ability to raise working capital is limited to the amount of money that can be obtained
through her own asset base and borrowing power.
How is a sole proprietorship taxed?
As a sole proprietor you must report all business income or losses on your personal income tax return;
the business itself is not taxed separately.
(The IRS calls this "pass-through" taxation, because business profits pass through the business to be
taxed on your personal tax return.
Define a partnership
Partnership: An association of two or more persons to carry on, as co-owners, a business for profit.
Note the intent is to make a profit.
What is "joint and several" liability?
An unlimited liability (including personal assets) of each partner for all debts of the business whether
in contract or tort.
(from wiki) Joint and several liability is when multiple parties can be held liable for the same event or
act and be responsible for all restitution required. ... The liable parties would be required to pay the
entire damage award, which could be split among multiple parties or could come from just one party.
How is a partnership taxed? What does "pass through" taxation mean?
,Each partner is required to file a personal tax return, but the partnership itself is also required to file
an informational return. This return will indicate how income and loss was allocated among the
partners. All income and losses flow through to the partners and their returns.
Remember, the partnership agreement can state how income and loss is to be allocated among the
partners
Describe "partnership by estoppel" and why it should be avoided
Partnership by estoppel = Legally binding partnership that may arise where, in fact, no formal
partnership agreement is in effect
A person who by conduct or words represents, or allows him/herself to be represented, as a partner
in a firm is liable for the credit or loans obtained by firm on the basis of such representation.
Are partners required to share profits and losses equally? If not, how is it accomplished?
No, there should be a clause for that in the partnership contract
Each partner in a partnership has _________ authority in regards to making business decisions with
third party suppliers
Implied
Thus all partners are liable for the other partner's business decisions
(e.g. I buy a new sign for my practice and cannot pay my debt, thus my partner takes on the debt...not
cool)
S corp =
An S corp is considered a "pass-through entity," which means the business itself isn't taxed. Instead,
income is reported on the owners' personal tax returns
C corp =
A C Corp profits are taxed separately from personal. (Double taxation of appreciated assets on sale or
dissolution)
How do the limited liability company and the corporation increase an owner's general liability
protection?
Each owner (shareholder) enjoys limited liability with respect to the corporation. If the corporation
incurs a debt that it cannot pay, a shareholder is only liable to the extent of the value of his stock (his
share of ownership). His personal assets cannot be reached for payment
What is a "close" corporation
A close corporation is a corporation that is exempt from a number of the formal rules usually
governing corporations, because of the small number of shareholders it has
, How is the stock associated with a close corporation restricted?
The shareholders will have to approve the sale of shares (stock) to someone outside the corportaion
and will probably have the "right to first refusal" on said stock...meaning that the shareholders are
offered the stock first, and have the right to purchase or refuse to purchase.
What fringe benefits does the C Corp allow its owners?
The corporation is your employer and you are an employee of the corporation. You may own all of the
stock of the corporation but you still are its employee. An advantage of this arrangement is that many
fringe benefits to employees are deductible to the corporation as a business expense. These include
health and accident insurance premiums, group life insurance, death benefits and disability insurance
Define: contract
A CONTRACT can be defined as the total legal obligation created when you make a bargain.
Why are oral contracts discouraged and in some cases unenforceable?
Oral contracts, with a few exceptions, are enforceable, but, unlike a writing, oral contract provisions
may be difficult to prove.
What are the six elements of a contract?
Agreement
Consideration
Contract Capacity
Legality
Reality of Assent
Form
What are the six elements of a contract?
Agreement
Consideration
Contract Capacity
Legality
Reality of Assent
Form
What are the six elements of a contract?
Agreement
Consideration
Contract Capacity
Legality
Reality of Assent
Form
latest update 2024
Which practice association is the easiest and least expensive to form and why?
The Sole Proprietorship is the simplest form of business organization and, therefore, the least
expensive to maintain. There are normally no formalities required to begin
What is a Certificate of Assumed Business Name and how does it pertain to a dental practice?
A Certificate of assumed business Name is a state form used to identify your business.
Does a sole proprietorship limit the owner's personal liability? Why or why not?
No
All business property and all personal property are subject to the claims of creditors. In other words,
this type of business organization provides no protection to the owner's personal assets.
Why is a sole proprietorship at a disadvantage compared to other associations when raising working
capital?
The SP's ability to raise working capital is limited to the amount of money that can be obtained
through her own asset base and borrowing power.
How is a sole proprietorship taxed?
As a sole proprietor you must report all business income or losses on your personal income tax return;
the business itself is not taxed separately.
(The IRS calls this "pass-through" taxation, because business profits pass through the business to be
taxed on your personal tax return.
Define a partnership
Partnership: An association of two or more persons to carry on, as co-owners, a business for profit.
Note the intent is to make a profit.
What is "joint and several" liability?
An unlimited liability (including personal assets) of each partner for all debts of the business whether
in contract or tort.
(from wiki) Joint and several liability is when multiple parties can be held liable for the same event or
act and be responsible for all restitution required. ... The liable parties would be required to pay the
entire damage award, which could be split among multiple parties or could come from just one party.
How is a partnership taxed? What does "pass through" taxation mean?
,Each partner is required to file a personal tax return, but the partnership itself is also required to file
an informational return. This return will indicate how income and loss was allocated among the
partners. All income and losses flow through to the partners and their returns.
Remember, the partnership agreement can state how income and loss is to be allocated among the
partners
Describe "partnership by estoppel" and why it should be avoided
Partnership by estoppel = Legally binding partnership that may arise where, in fact, no formal
partnership agreement is in effect
A person who by conduct or words represents, or allows him/herself to be represented, as a partner
in a firm is liable for the credit or loans obtained by firm on the basis of such representation.
Are partners required to share profits and losses equally? If not, how is it accomplished?
No, there should be a clause for that in the partnership contract
Each partner in a partnership has _________ authority in regards to making business decisions with
third party suppliers
Implied
Thus all partners are liable for the other partner's business decisions
(e.g. I buy a new sign for my practice and cannot pay my debt, thus my partner takes on the debt...not
cool)
S corp =
An S corp is considered a "pass-through entity," which means the business itself isn't taxed. Instead,
income is reported on the owners' personal tax returns
C corp =
A C Corp profits are taxed separately from personal. (Double taxation of appreciated assets on sale or
dissolution)
How do the limited liability company and the corporation increase an owner's general liability
protection?
Each owner (shareholder) enjoys limited liability with respect to the corporation. If the corporation
incurs a debt that it cannot pay, a shareholder is only liable to the extent of the value of his stock (his
share of ownership). His personal assets cannot be reached for payment
What is a "close" corporation
A close corporation is a corporation that is exempt from a number of the formal rules usually
governing corporations, because of the small number of shareholders it has
, How is the stock associated with a close corporation restricted?
The shareholders will have to approve the sale of shares (stock) to someone outside the corportaion
and will probably have the "right to first refusal" on said stock...meaning that the shareholders are
offered the stock first, and have the right to purchase or refuse to purchase.
What fringe benefits does the C Corp allow its owners?
The corporation is your employer and you are an employee of the corporation. You may own all of the
stock of the corporation but you still are its employee. An advantage of this arrangement is that many
fringe benefits to employees are deductible to the corporation as a business expense. These include
health and accident insurance premiums, group life insurance, death benefits and disability insurance
Define: contract
A CONTRACT can be defined as the total legal obligation created when you make a bargain.
Why are oral contracts discouraged and in some cases unenforceable?
Oral contracts, with a few exceptions, are enforceable, but, unlike a writing, oral contract provisions
may be difficult to prove.
What are the six elements of a contract?
Agreement
Consideration
Contract Capacity
Legality
Reality of Assent
Form
What are the six elements of a contract?
Agreement
Consideration
Contract Capacity
Legality
Reality of Assent
Form
What are the six elements of a contract?
Agreement
Consideration
Contract Capacity
Legality
Reality of Assent
Form
