Business LAW Flashcards
Gross Negligence
CPA recklessly departs from the standards of due care.
Sometimes called Constructive Fraud
Circular 230 requirements for
WRITTEN ADVICE
Practitioner must use reasonable efforts to solicit the necessary information to identify and ascertain the facts relevant to written advice
PRIVITY DEFENSE
Defense to negligence actions by 3rd parties
Reasonable care to clients, to any person or limited foreseeable class of persons whom the CPA knows will be relying on the CPA’s work
Covered Opinion
Any written or electronic advice concerning transactions specified by the IRS as LISTED transactions
ACTING WITH SCIENTER
An intent to deceive
LIMITED PARTNERSHIP
AT LEAST
1 General Partner
1 Limited Partner (cannot control business)
LIMITED LIABILITY PARTNERSHIP
No personal liability
DO NOT PAY INCOME TAX
PARTNERSHIP
All general partners are personally liable for the obligations of the entity
No requirement to file with the state
Joint ventures are similar to this and are more on a short-term basis
CORPORATIONS
Can sell ownership w/o unanimous consent of other owners
Restricted - restricted shares, voting trusts or voting agreements
LIMITED LIABILITY COMPANY
NOT personally liable
All owners can participate in management
Has an Operating Agreement
Contract Damages
Punitive Damages are not usually in contract actions, they are for intentional misconduct or fraud
Restitution of benefit conferred
Restore the benefit - Give back to the other party the payment that was made
Compensatory Damages
Breach of a personal service contract
Consequential Damages
Available if the damage was reasonably foreseeable
A voluntary petition is not subject to the $18,600 floor
The floor is only applicable to involuntary petitions