UNT - BLAW 3430 Final Exam Review PDF

Preview

Summary

105 questions and answers along with definitions. Great review! I took this in spring 2018 with engler...

Description

Final Exam Review 1.Absolutes

of a Partnership: Absent in agreement to the contrary:

1) each partner shares equally in the profit and losses 2) each partner has the right to participate in the management 3) no partner has a right to compensation 4) each partner has a right to inspect the books and records. 2.Agency:

Relation in which one person acts for or represents another by the latter's authority.

3.Agency

Agreement: a common law contract governed by all common law contract law principles.

4.Agency

Law: Liability of Torts and Crimes

5.Agent:

Person authorized to act on another's behalf

6.Agent's

Liability: depends on agent's capacity to contract

7.Alien Corporation:

Corporation created under the laws of any other government or country.

i.e Corporation established in Korea and conducting business in the United States. 8.Articles

of Incorporation: The instrument under which a corporation is formed. The contents are

prescribed in the particular state's general incorporation statute. 9.As

a Citizen: If it has its principal office for the purpose of determining whether diversity of

citizenship exists between the parties to a lawsuit, so as to provide a basis for federal court jurisdiction. 10.As

a Person: A matter of construction based on the intent of the lawmakers in using the word.

11.Association:

partners.

A partnership must consist of two or more persons who have agreed to become

12.Board

of Directors: -Declare dividends

-Delegate Authority to officers -Manage the business of the corporation -Select, remove, and determine compensation of officers. for Profit: The business carried on by the association of two or more persons must be

13.Business

"for profit"

Does not exist for a single transaction) 14.Bylaws:

-The rules and regulations that govern the internal management of a corporation

-1st items of business at the organizational meeting. 15.Capacity

of the Agent: With Durable Power of Attorney; any person able to act, including

individuals, corporations, partnerships, and other associations, ordinarily has the _____________________________. 16.Capacity

of the Principal: if the principal is a minor or incompetent not under guardianship his

appointment of another to act as an agent is voidable, as are any resulting contract with third parties. 17.Capital:

Necessary for any business to function.

'aka' money 18.Centralized

Management: The shareholders of a corporation elect a board of directors that

manages the business affairs of the corporation.

The board appoints officers to run the day-to-day operations.

19.Classifications

of a Corporation: 1) Public vs Private

2) Profit vs Nonprofit 3) Domestic vs Foreign or Alien 4) Publicly Held vs Privately Held 5) Subchapter S vs Subchapter C 20.Closely

Held: Corporation that is owned by few shareholders and whose shares are not actively

traded. (usually made up of family and friends) 'aka' Privately Held. 21.Continuity:

Low - death, bankruptcy, or withdrawal of an owner results in the dissolution of the

association

High - not affected by death, bankruptcy, or withdrawal of owners. 22.Contract

Liability of Agent - Disclosed Principal: an agent may become liable if he expressly

assumes liability on the contract 23.Contract

Liability of Agent - Unidentified/Partially Disclosed or Undisclosed Principal: the

agent becomes personally liable to the third party on the contract. 24.Contract

Liability of the Principal: The power of an agent is his ability to change the legal

statues of his principal (i.e. when an agent enters into a contract for his principal, he creates new rights or liabilities for his principal.)

Depends on whether they're disclosed, unidentified/partially disclosed, or undisclosed. 25.Co-Ownership:

sharing of profits & right to manage and control the business

26.Corporate

Attributes: 1) it is a legal entity

2) it provides limited liability to its shareholders 3) its shares of stock are freely transferable 4) its existence may be perpetual 5) its management is centralized; and it is considered, for some purposes 6) a person 7) a citizen 27.Corporate

Powers: Statutory Powers and Purposes

(As a person, power to lend money) 28.corporation:

A legal entity separate and distinct from it owners

most are eligible to elect to be taxed as Sub. S which results in only shareholders being taxed and avoids double taxation. 29.Creation of

Agency: the fiduciary relationship that arises when one person(principal) manifests

assent to another person(agent) that the agent shall act on the principal's behalf and subject to the principals control, and the agent manifests assent or otherwise consents so to act.

ex. signing an employee handbook/contract 30.Creature

of the state: A corporation may be formed only by substantial compliance with a state

incorporation statute. (Doesn't exist without a formal filing)

31.Crimes:

A corporation may be liable for the violating statutes imposing liability without fault

-Punishment by fine, not imprisonment 32.Debt

Financing: -issuance of corporate bond

-corporations can issue a bond

(you make a loan to a corporation, you make the principal plus interest.) 33.Debt

Securities: Any form of corporation security reflected as debt on the books of the

corporation in contract to equity securities such as stock.

ex. bonds, notes, and debentures. 34.Disclosed

Principal: When an agent and third party interact, the third party has notice, knows the

agent is acting for a principal and knows the principals identity. 35.Dissociation:

Occurs when a partner ceases to be associated in carrying on of the business.

(method of distribution) 36.Dissolution:

The change in the relation of the partners caused by any partner's ceasing to be

associated with the carrying on, as distinguished from the winding up, of the business. 37.Distribution

of Assets: If the corporation ever dissolves, you have the right to your proportion of

share in the ______________________________. 38.Dividend: 39.Domestic

an individual share of something distributed. Corporation: Corporation created under the laws given of a states.

i.e. Corporation established in Texas and conducting business in Texas

40.Durable Power

of Attorney: A written instrument that expresses the principals intention that the

agent's authority will not be affected by the principals subsequent incapacity or that the agent's authority will become effective upon the principal's subsequent incapacity.

extends beyond mental capacity

ex. will before dementia 41.Duties

among Partners: 1) Fiduciary Duty

2) Duty of Obedience 3) Duty of Care

Each partner has a duty to inform his copartners and a duty to account to the partnership. 42.Duties

of Agent: Loyalty & Trust

Loyalty = Fiduciary Relationship - obedience, good conduct, diligence, and loyalty; duty to inform and duty to provide accounting

Trust = Power of Attorney - act or perform of all legal stuff 43.Duties

of Principal: C,R, I

Compensation, Reimbursement and Indemnification 44.Ease

of Formation: Business associations differ as to the formalities and expenses of formation.

Some can be created with no formality, while others require the filing of documents with the state.

45.Employment

Relationship: employer has right to control the physical conduct of employee.

Both Agents 46.Equity:

Selling of Shares of a company.

How a company makes money for the company. 47.External

Liability: If the business does not have sufficient funds to pay its debts, each and every

owner has a personal liability to the creditors for the full amount of the debts. 48.Factors

Affecting the Choice: 1) Ease of Formation

2)Federal & State income tax laws 3)external liability 4) management & control 5) transferability of ownership interests 6) continuity

The importance of each will vary with the specific needs and objectives of the owners. 49.Federal

& State income tax laws: Business entities are not considered to be separate taxable

entities and taxation is on a "Pass through" basis. Pass through treatment results in only owners being taxed and thus avoids double taxation on the business income. 50.Fiduciary

Duties: Duty of utmost loyalty and good faith, such as that owed by fiduciary such as

an agent to his/her principal. 1) Conflicts of Interest 2) Self-Dealing 3) Duty not to compete

51.Foreign

Corporation: Corporation created under the laws of any other state.

i.e. Corporation established in Texas and conducting business in Indiana. 52.Formalities

of Incorporation: 1) Selection of Name

2) Incorporators 3) Articles of Incorporation 4) Organizational Meeting 5) Bylaw 53.Formation

of a Partnership: Whether or not parties intend to do so.

may be done consciously or unconsciously

may result from oral or written agreement between parties from an informal arrangement or from conduct of the parties

if two or more share control and profits of a business, law may deem them partners without regards to how they characterize themselves. 54.General

Partnership: An unincorporated business association consisting of two or more persons

who co-own a business for profit.

Formed without formality nor filed documents.

can default if business is conducted by two or more people who fail to file with the state to form a business organization.

55.Incorporators:

-the persons who sign the articles of incorporation.

-Although they perform a necessary function, in many states their services are short lived, ending with the organizational meeting following incorporation. 56.Indemnification: 57.Independent

to reimburse one for a loss already incurred.

contractors: Non-employee agent.

Principal has right of control over this agent but does not control the manner and means of agent's performance. 58.Information

Necessary for a Partnership Agreement: 1) Firm name and identity of the

Partners 2) Nature and scope of the partnership business 3) Duration of the Partnership 4) Capital Contributions of each partners 5) Division of profits and sharing of losses 6) Managerial Duties of each partners 7) Provision of salaries; if desired 8) Restrictions, if any, upon the authority of particular partners to bind the firm 9) Any desired variations from the partnership statutes default provisions governing dissolution 10) A statement of the method or formula for determining the value of a partners interest in the partnership. 59.Joint

and Several Liability: a creditor may sue the partners jointly as a group or separately as

individuals 60.Joint

Venture: An association of two or more persons to carry on a single business transaction

for profit.

61.Legal

Action: A partner may maintain a direct suit against the partnership or another partner for

legal or equitable relief with or without an accounting as to partnership business, to enforce the partners rights under the partnership agreement. 62.Legal

Entity: An organization having a legal existence separate from that of its members.

63.Limited

Liability Company (LLC): an unincorporated business association that provides

limited liability to all of its owners(members) and permits all of its members to participate in management of the business. 64.Limited

Partnership (definition): Also know as a Partnership.

An association of two or more persons to carry on, as co-owners, a business for profit (1 general and ! limited partner)

must file a certificate with the states

Each general Partner has equal right.

Limited partners have no right to control. 65.Limited

Partnership (Formation): -A partnership formed by two or more persons under the

laws of a state and having one or more general partners and one or more limited partners -each partner can participate in management -formal registration - written statement -certificate of formation (like a birth certificate for the law) - most expensive filing fee = $700

66.Management

& Control: In some entities, the owners can fully share in the control of the

business. In other types of business associations, the owners are restricted as to their right to take part in control. 67.Management

Structure: Is pyramidal with the shareholders at the base, followed by the Board

of Directors, then the officers. 68.Nonprofit

Corporation: The profit may not be distributed to its members, directors, or officers

but must be used exclusive for the charitable, educational, or scientific purpose for which the corporation was organized.

ex American Heart Association, YMCA, Boy Scouts, Girl Scouts 69.Officers:

Run the day-to-day operations of the corporation.

70.Order of

Distribution: 1) Liquidation - outside creditors get paid first

2) Loans by partners 3) Returns of capital contribution 71.Organization

Meeting: The 1st meeting, held to adopt the bylaws and appoint officers.

0if the articles do not name the corporations initial directors, the incorporators hold the ___________________ to elect directors and either incorporators or directors complete the organization of the corporation. 72.Owners

threefold interest in corporation, conferred by shares: Right to participate in:

1) control 2) earnings of corporation 3) the residual assets of corporation on dissolution.

Shareholders interest is usually represented by a certificate of ownership and is recorded by the corporation. 73.Partnership:

1) An association

2) two or more 3) persons - can consist of 2 corporations joining together to have a general partnership 4) to carry on a business 5) As co-owners 6) for profit/loss

The biggest evidence of a _____________ is that the persons are equally responsible for losses. 74.Partnership

Agreement: The agreement, whether written, oral, or implied, among the partners

concerning the partnership, including amendments to the ________________________. 75.Partnership

Capital: Total money and property contributed by the partners for permanent use by

the partnership. 76.Perpetual

Existence: A corporation has _______________________ unless otherwise states in

its articles on incorporation.

Will terminate upon its dissolution or merger into another business. Death, withdrawal, or addition of shareholder, director, or officer does not terminate its ____________________. 77.Power

of Attorney: An instrument authorizing a person to act as the agent or attorney of the

person granting it.

most common formal agency relationship (beyond employment) 78.Principle 79.Private

Sources for Corporate financing: involve debt and equity investment

Corporation: one organized to conduct either a privately owned business enterprise for

profit or a nonprofit corporation. 80.Profit

Corporation: one founded for the purpose of operating a business for profit which

payments are made to the corporate shareholders in the form of dividends.

ex. Target, Apple, Walmart, dell 81.Public

Corporation: one created to administer a unit of local civil government or one created by

the United States to conduct public business.

i.e. post office 82.Publicly

Held Corporation: Corporation whose shares are owned by a large number of people

and are widely traded. -no accepted minimum of shareholders. 'aka' Publicly Traded 83.Purposes:

All state incorporation statutes provide that a corporation may be formed for any

lawful purpose. 84.Respondeat

Superior Doctrine: a person who conducts his business activities through the use of

employees should be liable for the employees' tortious conduct in carrying out those activities. 85.Return

of Capital: -A partner does not have a right to receive a distribution of the capital

contributions in his account before withdrawal or liquidation of the partnership.

-After creditors have been paid, each partner is entitled to repayment of his capital contribution during the winding up of the firm. -Not entitled to interest on his capital contribution unless there's a delay in the return. 86.Rights

among Partners: 1) Their right to use and possess partnership property for partnership

purposes. 2) Their transferable interest in the partnership. 3) Their right to share in distributions. 4) Their right to participate in the management 5) Their right to choose associates. 6) Their enforcements rights. 87.Rights

to Share in Distributions: -Subject to contrary agreement of the partners

-A partner has no right to receive, and may not be required to accept, a distribution in kind. -Each partner is deemed to have an account that is credited with the partner's contributions and share of the partnership profits and charged with distributions to the partner and partners share of partnership losses. 88.Selection

of Name: most general incorporation laws require that the __________ contain a word

or words that clearly designate the organization as a corporation, such as corporation, company, limited, Corp., Co., Inc., or Ltd. -Must be distinguishable from any domestic corporation or any foreign corporation authorized to do business within the state. 89.Shareholders:

Have limited liability for the corporations debts. Their liability does not extend

beyond the amount of their investment.

'aka' the owner 90.Shareholders

(Responsibilities): -Elect and remove directors

-Approve fundamental changes

-their role is merely to vote. 91.Shares:

a proportionate ownership interest in a corporation.

-they do not, in any way, vest their owner with title to any of the corporations property -they do confer on owner a threefold interest in corporation 92.Sole

Proprietorship: An unincorporated business consisting of one person who owns and

completely controls the business.

Formed without formality and no documents need to be filed.

Can default if business is conducted and failure to file with state to form a LLC or Corporation. 93.Statutory

Powers: 1) to have perpetual succession