Question

Life of the organization? What events can cause the end of the business. Which entities do not have a natural end (Indefinite)?

Possible answers:  1. Indefinite. 2. Until the death a 'owner'. 3. Until the death of a stockholder. 4. Until the death of a Member. 5. Death of a Partner 5b. Choice of any partner to withdraw. 6. N/A 7. Agreement of Partners 8. Decision of Owner 9. Bankrupcy 10. Vote of Stockholders to liquidate 11. Vote of Members to liquidate.

Why?

Answer 1

There are various forms of organizations - sole proprietorship, corporations, General partnership, Limited Liability Companies etc. A sole proprietorship is not a legal entity separate from its owners. A Sole proprietorship has no continuity of life. It automatically terminates on the death or disability of the owner. A corporation is a separate legal entity with a life of its own. It can continue indefinitely. It is not affected by the death, withdrawal or incapacity of its shareholders, directors or officers. Also the transfer of the shares of the corporation by one shareholder to another does not affect its existence. The corporation can be dissolved voluntarily upon agreement by the shareholders or the directors may dissolve the corporation on bankruptcy or if it goes out of business or it can be dissolved by court order. A general partnership automatically dissolves when a partner dies, resign from partnership or become disabled etc. The original partnership is dissolved and a new partnership is created to carry on the business. Limited liability companies may have multiple owner(members) or single member limited liability companies. In case of single member limited liability companies, the death or disability will result in dissolution of limited liability companies. In case of multi member limited liability companies, the death or withdrawal of a member will result in dissolution of limited liability companies unless there are other members and LLC operating agreement permits continuation of the business or if the remaining members agree to continue the business. Thus the following events can cause the end of the business - 2. until the death of a 'owner'. 4. until the death of a Member. 5. Death of a partner. 5b. Choice of any partner to withdraw. 7. Agreement of Partners. 8. Decision of owner 9. Bankrupcy 10. Vote of stockholders to liquidate 11. Vote of Members to liquidate. Corporations do not have a natural end. It has an indefinite life and has a legal entity separate from its stockholders.