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Commonwealth 2nd Quarter > Business Law Exam 4 > Flashcards

Business Law Exam 4 Flashcards

1
Q

Agency

A

Specialized business relationship between one party known as the “principal” and another known as the “agent”

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2
Q

Nature of Agency Relationship

A

Parties

Delegation of powers

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3
Q

Parties

A

Principal

Agent

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4
Q

Principal

A

Party who appoints a second party to serve as an agent

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5
Q

Agent

A

Party appointed by a principal to enter into a contract with a third party on the principal’s behalf

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6
Q

Delegation of Powers

A

From principal to agent
Act in good faith on behalf of principal’s interests
Enter into contracts on principal’s behalf

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7
Q

Classification of Agents

A

General agent

Special agent

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8
Q

General Agent

A

Authorized to carry out particular kind of business or all business at a location
• FDIC
• Funeral Director in Charge

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9
Q

Special Agent

A

Authorized to transact specific act or act(s)

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10
Q

Creation of Agent’s Authority

A

Express authority
Implied authority
Apparent authority

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11
Q

Express authority

A

Stated in agreement creating agency
Authority by appointment
Example:
Written Power of Attorney

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12
Q

Implied authority

A

Authority to do things in order to carry out express authority

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13
Q

Apparent authority

A

Authority agent believed to have because of principal’s behavior

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14
Q

Other Employment Relationships

A

Independent contractor
Employer
Employee

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15
Q

Independent Contractor

A

Person who undertakes to perform a specified task according to the terms of a contract
Other contracting party has no control except as stated in the contract

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16
Q

Employer

A

Party who hires employees to do certain work

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17
Q

Employee

A

Person hired to perform work

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18
Q

Employer and Employee

A

Employee performs work for employer
Employee under control of employer for work and manner of completion
Employer liable for injuries to third parties caused by negligence of employees
Employer liable for torts committed by employee acting within scope of employment
Employer must comply with laws relating to employees
Social security deductions (FICA)
Worker’s compensation (FUTA and SUTA)
Federal and state income tax withholdings

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19
Q

Agent’s Duties to Principal

A 
Loyalty and good faith
Obedience
Reasonable skill and diligence
Accounting
Information
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20
Q

Principal’s Duties to Agent

A

Compensation
Wages
Reimbursement
Expenses incurred during course of employment
Indemnification
Compensation for sustained losses
Adherence to terms of employment contract

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21
Q

Termination of Agency

A

By act of the parties

By operation of law

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22
Q

By Act of the Parties

A

Original agreement
Subsequent agreement
Revocation
Renunciation by agent

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23
Q

By Operation of Law

A 
Subsequent illegality of subject matter
Death or incapacity of either party
Destruction of subject matter
Bankruptcy of principal**
Dissolution of the corporation
24
Q

Termination of agency

25
Types of Business Organizations
Proprietorship Partnership Corporation
26
Proprietorship
Business owned by one person who is subject to claims of creditors Simple form of business organization Proprietor receives all profits and assumes all losses Proprietor bears all risks and has personal liability for all debts Death of the proprietor terminates the business
27
Partnership
Voluntary association of two or more people who have combined their resources to carry on as co-owners of a lawful enterprise for their joint profit
28
Kinds of Partners
General Silent Limited
29
General Partner
Individual actively and openly engaged in the business and held out to everyone as a partner
30
Silent Partner
Individual who takes no active part in management of a business, but has capital invested in the business
31
Limited Partner
Partner who has his/her liability for the firm’s debts limited to the amount of their investment
32
Operations of a Partnership
Duties of a partner Rights of a partner Liabilities of a partner
33
Duties of a Partner
``` Exercise loyalty and good faith Use reasonable care and skill Conform to contract of partnership Maintain records Inform ```
34
Rights of a Partner
``` Participate in management Inspect financial data Contribution Withdraw advances (business money for personal use) Withdraw profits ```
35
Liabilities of a Partner
For contracts of the partnership | For torts
36
Dissolution of a Partner
By acts of the parties By court decree By operation of law
37
Dissolution by Acts of the Parties
By agreement By withdrawal or alienation By expulsion
38
Dissolution by Court Decree
``` Insanity Incapacity Misconduct Futility Bankruptcy ```
39
Dissolution by Operation of Law
Illegality | Death
40
Corporation
An artificial being, invisible, intangible, and existing only in contemplation of law An entity that is something that has a distinct existence separate and apart from the existence of its individual members
41
Classifications of Corporations
Public | Private
42
Public Corporations
Formed to carry out government functions • State university • Public hospital
43
Private Corporations
Formed by individuals to perform some non-governmental function • For profit • Non-profit (not-for-profit)
44
Formation of a Corporation
Articles of Incorporation | Charter
45
Articles of Incorporation
written document setting forth facts about a corporation prescribed by law for issuance of a charter and asserting the corporation has complied with legal requirements.
46
Charter
grant of authority from a government to exist as a corporation
47
Corporate Structure
Stock holders Board of Directors Officers
48
Stock Holders
Those having title to one or more shares of stock in a corporation. Represent combined ownership of the corporation. Shareholders Conduct stockholders meetings at least once a year.
49
Rights of Stockholders
Receive properly executed stock certificates as evidence of ownership Attend corporate meetings and vote (unless denied by express agreement). Receive proportionate shares of profits when distributed as in dividends.
50
Proxy
Person authorized to vote for another, written authorization to vote for another.
51
Board of Directors
Body elected by stockholders to act on behalf of the corporation and carry out the board’s policies.
52
Officers
(President / Vice-President / Secretary / Treasurer) | Authorized by Board of Directors to carry out board policies.
53
Dissolution of a Corporation
Voluntary | Involuntary
54
Voluntary Dissolution
By vote of the stockholders Corporation pays debts, Distributes remaining assets to stockholders as to number of stocks owned, and Surrenders articles of incorporation
55
Involuntary Dissolution
``` Action of the court or state Due to forfeiture or abuse of corporate charter, Violation of state or federal law, Fraud in obtaining the charter, or Failure to pay specified taxes. ```
56
Manner of Dissolution
Existence terminated except to complete its business. Cannot sue, own property, or form contracts. Except to convert assets to cash.

Commonwealth 2nd Quarter (22 decks)

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