South Carolina Franchise Forms - South Carolina Franchise Law
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South Carolina Franchise Forms FAQ
What is a franchise?
There is a definition of a franchise which has been developed by the Federal Trade Commission. Basically, a franchise involves an owner of a trademark, trade name and/or copyright giving others a license under certain conditions to use these trademarks, trade names or copyrights in providing goods or services to the public. The franchisor is the party who grants the franchise, and the franchisee is the party who receives the franchise.
What is the legal relationship between a franchisor and franchisee?
Technically, the relationship between a franchisor and franchisee is a relationship between two independent contractors. Their rights are determined by the franchise agreement. A franchise then is not a separate business entity, but is a business relationship between two separate business organizations such as a sole proprietorship, a corporation, or a partnership. The relationship between the franchisor and franchisee is controlled by the franchise contract. A corporation, sole proprietorship, or partnership may own the franchise contract or may be the entity entering into the franchise contract.
What laws govern franchises?
There are laws that restrict termination of some franchises. In some states, prior notice of termination is required. Owners of automobile dealership franchises are protected from termination of their dealerships in bad faith. This protection is provided by the Federal Automobile Dealers Franchise Act.
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What are Articles of Incorporation?
Articles of Incorporation are legal documents that are filed with the state government when a company wants to become officially recognized as a corporation. These documents outline important information about the company, such as its name, purpose, management structure, and the number of shares it is authorized to issue. In South Carolina, the Articles of Incorporation need to include the corporation's name, address, registered agent, purpose, and the number of shares it will issue. They must be filed with the Secretary of State, along with the required filing fee, to establish the corporation's legal existence in the state.
What to Include in Articles of Incorporation
When writing articles of incorporation in South Carolina, there are a few important things that you need to include. Firstly, you should clearly state the name of your corporation, making sure it is unique and not already registered with the Secretary of State. You must also provide a detailed description of the corporation's purpose or activities, outlining what the company will do. It is crucial to include the duration for which the corporation will exist, which can be perpetual or for a specific period. The articles should also mention the number of shares of stock the corporation is authorized to issue and their par value, if any. Additionally, you need to include the names and addresses of the initial directors, as well as the name and address of the registered agent who will receive legal documents on behalf of the corporation. Finally, you should sign and date the articles, ensuring they comply with the state's requirements for filing.
1. Full Name of Corporation
The full name of the corporation in South Carolina is the legal and official name of a company that operates within the state of South Carolina. It is the complete title that is used to identify and distinguish this particular corporation from others. In simple terms, it is the unique name that represents the organization in the business world and within the legal framework of South Carolina.
2. Principal Place of Business
The Principal Place of Business is the main location where a business operates and conducts its daily activities. In South Carolina, the Principal Place of Business refers to the primary office or establishment of a company that is located within the state boundaries of South Carolina. This means that the majority of a company's operations, decision-making, and administration are carried out at this particular location. It is important for businesses to have a clear and defined Principal Place of Business as it helps determine their legal jurisdiction, tax obligations, and compliance with local regulations in South Carolina.
12. Limitation of Director’s Liability
In South Carolina, there are limitations on the liability of directors. This means that directors of a company are not personally responsible for the company's debts or legal obligations in most cases. However, there are certain situations where directors can be held liable, such as if they act unlawfully, breach their fiduciary duties, or engage in fraudulent activities. It's important for directors to be aware of these limitations and always act in the best interest of the company and its stakeholders to avoid any potential legal consequences.
