Student Solution

-->

"Education is the most powerful weapon which you can use to change the world”
– Nelson Mandela

1 University

1 Course

1 Subject

Ch 39 1 Corporations Discussion

Ch 39 1 Corporations Discussion

Q A, B, and C each own one-third of ABC Company. A would like to sell his share of the business to D. 1) If this was a partnership what would A need to do (if anything) before she can sell her interest to D? 2) If this was a corporation would your answer to (1) change? Which of the above alternatives is preferable? Is there anyway to make the ability to sell A's interest to D substantially similar under the 2 alternatives? X forms Y Inc. in compliance with all the technical requirements outlined in pp 748-751. However, X pays all of the corporation's bills out of his personal checking account, never holds a corporate meeting, and never bothers to tell any of Y Inc.'s suppliers/customers that Y Inc ever exists! What risk is X incurring in running the affairs of Y inc's business that way?

View Related Questions

Solution Preview

) If this had been a partnership, there could never be any chances for A to sell her interest to D. This is because there would never be any legally possible way to ensure that D could be transferred rights of ownership of the A’s share within the rules of partnership. In case of the partnership form of business, it is not possible that one partner transfers the rights of ownership to another partner.