BA Flashcards

You may prefer our related Brainscape-certified flashcards:
1
Q

General Partnership Rule

A

A partnership is an association of two or more persons who carry on as coowners a business for profit.

Partners = personally liable - can be held jointly and severally liable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Limited Partnership

A

Formed by filing certificate with state

GP - personally liable
LP - not personally liable unless serve as GP

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Corporation by Estoppel

A

An entity or person dealing with a business as a corporation may be estopped from denying its corporate status and seek personal liability from the owner.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Implied Authority

A

Authority partner reasonably believes they have as a result of actions of the partnership

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

GP Contractual Liability

A

Liable for contracts entered into by a partner if partner has authority

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Apparent Authority

A

Exists if partnership holds partner out as possessing certain authority or an act by the partner induces another to reasonably believe authority exists

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Partnership Tort Liability

A

Liable for torts committed by partners/employees in ordinary course of partnership business or with authority of partnership

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Promoter Liability

A

A promoter is personally liable for contracts entered into prior to incorportion UNLESS:
1. Novation - corp & other party agree to substitute corp for the promoter, or
2. Adoption - corp adopts contract and agrees to take liability with promoter

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Piercing the Corporate Veil

A

Must pierce corporate veil to hold individual investors or shareholders personally liable

Factors:
1. Alter ego - observe corporate formalities?
2. Undercapitalization - at time of formation
3. Fraud

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Corporation Liability for Contracts

A

Corporation liable for contracts entered into by its agents or officers on behalf of corporation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Corporation Liability for Torts

A

2 Theories
1. Vicarious liability - liable for tort committed by officer/agent acting within scope of employment
2. Directly liable to a third party harmed by officer/agent conduct if (1) authorizes/ratifies agent’s conduct; (2) negligently hires/supervises, or (3) delegates non-delegable duty

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Duty of Care - Corporation

A

Directors have duty to act with care of an ordinarily prudent person and to make decisions in good faith

Defenses:
1. Reliance - entitled to rely on employees/officers/experts
2. Business Judgment Rule

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Business Judgment Rule

A

Rebuttable presumption that a director reasonably believed his actions were in the best interest of the corporation

SH can overcome by showing:
1. Did not act in good faith
2. Not informed to extent necessary
3. Not objective and had material interest in decision
4. Failed to timely investigate a matter

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Duty of Loyalty

A
  1. Self-Dealing
  2. Usurping Corporate Opportunities
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Self-Dealing

A

If director engages in transaction to benefit himself

Safe Harbor Rule
1. Disclose all material facts to board and get approval from majority of disinterested directors
2. Disclose all material facts to SHs and get approval from majority of disinterested SHs, or
3. Transaction is fair to corp at time it was made

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Shareholder Lawsuits

A
  1. Direct Action - if breach of FD
  2. Derivative Suit
16
Q

Shareholder Derivative Suit Requirements

A
  1. Standing - must have been SH at time of the harm, hold shares throughout litigation, and fairly and adequately represent interest of corporation
  2. Demand or demand futility - must ask board to bring suit first
17
Q

2 Steps to Terminating a Partnership

A
  1. Dissolution - triggered by an event
  2. Winding up - discharging liabilities
18
Q

Corporation Rule

A

A corporation is formed by filing articles of incorporation with the Sec. of State and provides limited liability to board members, officers, and shareholders.