Business Law Flashcards
what are the rules and stipulations of an exempt offering under Reg D rule 506?
up to 35 nonaccredited investors may purchase shares. there is no limit on the placement of securities as long as the other requirements are met. the issuer needs to take reasonable steps to see that purchasers of the exempt offering are not underwriters and are buying for investment. the SEC must be notified within 15 days of the first sale of the securities.
what are the rules for filing a valid involuntary petition against someone?
there needs to be 12 creditors, or one creditor needs to be owed at least $14,425 of unsecured debt.
what are the rules on preferential transfers?
the trustee can set aside a payment to a creditor made within 90 days previous to the bankruptcy filing. A payment to an insider within a year before the bankruptcy can also be set aside as preferential. If you receive “new value” such as buying something before the bankruptcy, that won’t be preferential.
an unrecorded mortgage has priority over a subsequently recorded mortgage if the subsequent mortgagee:
knew of the un-recorded mortgage. If another mortgage company knows about an existing mortgage- even if it’s unrecorded, the unrecorded mortgage will take priority.
indemnity contract:
you promise to pay your friend if he has to pay someone 10k
suretyship contract:
you promise your friend’s bank that you’ll pay off his car loan if he doesn’t pay it
who enforces anti-trust laws?
The DOJ’s anti-trust division and the FTC
what types of entities are exempt from the registration requirements of the securities act of 1933 when they issue securities?
charities, railroad company, farmer’s cooperative, or banks
how does a suretyship work if 2 people are each 50% but one is released without the other one knowing?
before the one is released, either one could be forced to pay the entire amount, but they would then have the right of contribution to go after 50% from the co-surety. when one is released, the remaining surety is then only liable for 50% total.
which needs additional consideration to be binding: a material modification involving the sale of real estate or the material modification of a sale of goods under the UCC?
the real estate. UCC transactions can be modified without new consideration
