5) Business Entities

Question 1

Employee

Answer 1

• Works under direction and scope of employer

Question 2

Employee master/servant relationship

Answer 2

• Respondeat superior applies

- Taxes must be withheld

Question 3

Independent contractor

Answer 3

• Controls own hours/ details of job
• Pays own taxes
• Employer not responsible for negligence

Question 4

Practice entities

Answer 4

• Sole-proprietor
• General partnership
• Professional corporations
• Limited Liability Company “L.L.C.”, Registered Professional Partnership “L.L.P.”

Question 5

Sole-proprietor

Answer 5

• C-Schedule tax (On personal income tax return)

- Unlimited liability for torts or employees, malpractice

Question 6

General partnership

Answer 6

• Based on a partnership agreement, is nothing more than two or more proprietors
• Flow-through entity (schedule C on personal returns with income/losses and expenses distributed according to agreement)
• Unlimited liability for all partners

Question 7

Professional corporations

Answer 7

• Partial limited liability (against all but professional liabilities)
• Taxes:i. Sub-Chapter S Corporation (Flow through taxes for small businesses) and C Corporation (taxable entity)

Question 8

Limited Liability Company “L.L.C.”, Registered Professional Partnership “L.L.P.”

Answer 8

• Partial limited liability
• “Check the box” to elect flow-through or entity taxation
• Often set up as a partnership of P.A.s

Question 9

Acceptance (contracts essential elements)

Answer 9

• Generally, an offeror can revoke an offer any time before acceptance
• A revocation is not effective until received
• An offer can expire according to it’s own terms (“This offer is open until…”)
• An offer can expire by operation of law (E.g., the subject of the offer is no longer available, the terms could no longer be applied to the subject)

Question 10

Consideration (contracts essential elements)

Answer 10

• There must be some exchange of value and (usually) detriment
• Differentiates a contract from a mere gift or favor
• Courts generally look for the presence of consideration, not at the adequacy of it (people are free to enter into a bad deal)

Question 11

Defenses (contracts)

Answer 11

• Fraud/Misrepresentation
• Illegality – e.g., a contract that violates the AKS would be void
• Lack of legal authority
• Mutual mistake

Question 12

Lack of legal authority (defenses)

Answer 12

• Authority is based on the law of agency
• Express Authority – power of agent expressed to contracting parties by principal
• Implied Authority- Implied by actions or position within principal/organization

Question 13

Oral contracts

Answer 13

• Oral contracts are legally enforceable unless a “Statute of Frauds” applies
• Statute of Frauds requires written agreements
• Oral contracts enforceable legally, but difficult to prove

Question 14

Statute of Frauds examples

Answer 14

• Contracts to buy or sell real estate
• Consumer contracts to purchase goods that cost greater than $500
• Contracts in consideration of marriage (pre-nuptial)

Question 15

Parole evidence rule

Answer 15

• Written contracts that are unambiguous cannot be modified by outside (parole) testimony to amend modify or even clarify a contract, must be modified by a written amendment signed by the party against whom contract is being enforced
• A rule of evidence – can show modification of a contract by the conduct of the parties
• Does not apply to ambiguous provisions where the intent of the parties is not clear from the face of the contract

Question 16

States are constitutionally delegated the right to license dangerous professions under their “police powers”

Answer 16

• Licensing Statues are also referred to as “practice acts”

- Florida Statute Chapter 461 is the Florida Podiatric Practice Act

Question 17

States can create their own standards for the licensure as professional in the respective practice acts

Answer 17

• Generally, however basic standards (education, residency) are fairly uniform from state to state

Question 18

States normally delegate the regulation (rulemaking adjudicating, and discipline) to a professional board (Florida - “Board of Podiatric Medicine”)

Answer 18

• These Boards make determinations on licensing, discipline and interpretation of their practice act

Question 19

Upon application a licensee is first examined for the pre-requisites for licensure. If statutory pre-requisites do not exist, licensure must be denied.

Answer 19

• On the other hand, certain matters such as discipline in another state, expulsion from a school or program, conviction of a felony, etc. places licensure in a more discretionary realm of the licensing board, subject only to standards of reasonableness

Question 20

States can act upon and application in one of the following ways

Answer 20

• Licensure can be granted
• Licensure can be denied
• Licensure can be granted with a restriction

Question 21

Licensure can be granted with a restriction

Answer 21

• Probation
• Limitation
• Fine
• Other conditions such as CE requirements, etc.

Question 22

A podiatrist can be disciplines for

Answer 22

• Violating his Practice Act
• Violation of another law or statute that “relates to the practice of podiatric medicine.” (Note “relates to” usually broadly defined)
• Being disciplined in another state

Question 23

Discipline under a practice act includes (1-6)

Answer 23

• Obtaining license by fraud or mistake of the Board
• False or deceptive advertising
• Fraud
• Aiding or abetting unlicensed practice
• Failing to keep records
• Malpractice

Question 24

Discipline under a practice includes (7-11)

Answer 24

• Over-prescribing controlled substances
• Practicing podiatric medicine below the standard of care
• Exercising influence over a patient in such a way as to exploit the patient.
• Failing to report another licensee whom is known to be violating the law.
• Failure to obtain appropriate consent.

Question 25

Disciplines continued (12-13)

Answer 25

• Failing to perform a statutory or legal obligation.
• Being unable to practice with Skill and safety due to a physical or mental impairment, including by reason of use of drugs and alcohol.
• Note: An impaired practitioner can avoid discipline in many states by entering into an impaired practitioner program which usually requires clearance to practice and monitoring

Question 26

Normally disciplines will include at least

Answer 26

• Revocation
• Suspension
• Probation
• Reprimand
• Fines
• Continuing education, and etc.

Question 27

Imposition of a discipline is normally accomplished by way of

Answer 27

• An administrative adjudicative procedure which can vary from state to state
  Most states include a constitutional right to judicial appeal, but ONLY after exhaustion of administrative remedies

Question 28

There is now a federal and state statutory scheme for the reporting of disciplines and violations

Answer 28

• National Practitioner’s Data Base

- Accessible only by state boards and credentialing agencies

Question 29

National Practitioner’s Data Base

Answer 29

• State disciplines
• Adverse actions against privileges in a hospital or managed care plan
• Malpractice actions