Business LAW Flashcards

1
Q

Gross Negligence

A

CPA recklessly departs from the standards of due care.

Sometimes called Constructive Fraud

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2
Q

Circular 230 requirements for
WRITTEN ADVICE

A

Practitioner must use reasonable efforts to solicit the necessary information to identify and ascertain the facts relevant to written advice

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3
Q

PRIVITY DEFENSE

A

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

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4
Q

Covered Opinion

A

Any written or electronic advice concerning transactions specified by the IRS as LISTED transactions

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5
Q

ACTING WITH SCIENTER

A

An intent to deceive

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6
Q

LIMITED PARTNERSHIP

A

AT LEAST
1 General Partner
1 Limited Partner (cannot control business)

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7
Q

LIMITED LIABILITY PARTNERSHIP

A

No personal liability
DO NOT PAY INCOME TAX

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8
Q

PARTNERSHIP

A

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

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9
Q

CORPORATIONS

A

Can sell ownership w/o unanimous consent of other owners

Restricted - restricted shares, voting trusts or voting agreements

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10
Q

LIMITED LIABILITY COMPANY

A

NOT personally liable
All owners can participate in management

Has an Operating Agreement

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11
Q

Contract Damages

A

Punitive Damages are not usually in contract actions, they are for intentional misconduct or fraud

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12
Q

Restitution of benefit conferred

A

Restore the benefit - Give back to the other party the payment that was made

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13
Q

Compensatory Damages

A

Breach of a personal service contract

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14
Q

Consequential Damages

A

Available if the damage was reasonably foreseeable

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15
Q

A voluntary petition is not subject to the $18,600 floor

A

The floor is only applicable to involuntary petitions

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16
Q

Valid Consideration

A

Will be present if there is a bargained for exchange of something of legal value

If the act promised has been performed then the bargain element fails

17
Q

Release of a Co-Surety

A

Is treated the same as release of security

The release discharges the other co-sureties to the extent of the impairment of their right.

18
Q

Social Security Tax

A

is A self-employed person’s net profit from self-employment

For employees it is calculated on employee’s gross wages, not taxable wages.

19
Q

In Chapter 7 of the Bankruptcy Code

A
  1. Secured Creditors are paid
  2. Unsecured Creditors entitles to a priority are paid
  3. Claims for alimony have the 1st priority among unsecured creditors

Money owed at alimony will NOT be discharged in bankruptcy

20
Q

For a Security Interest to attach

A

(i) there must be an agreement of the security interest and creditor taking control of the collateral

(ii) the creditor must give it value

(iii) debtor must have the rights in the collateral in order for the security interest to attach

21
Q

In an auction without reserve,

A

the goods must be sold if an offer is made. Of course, if no offer is made within a reasonable time, the goods need not be sold.

22
Q

Personal Liability for contracts entered into a business

A

Sole Prop - Liable
Partnership - ALL Liable
Limited Partnership - General Partner is Liable

23
Q

A gratuitous Surety will be released

A

When the creditor commits fraud

There is breach or duress

Surety lacks capacity or goes bankrupt or material change

A Compensated Surety would be released only to the extent harmed

24
Q

All employers who have quarterly payrolls of at least $1,500

A

or who Employ at least 1 person 1 day a week for 20 weeks in a YEAR must participate in FUTA

25
Q

In order for a contract to be valid

A

It must have Consideration

Agreement made up of an offer and an acceptance