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REG > Business Structures - 15 > Flashcards

Business Structures - 15 Flashcards

1
Q

What are shareholder rights

A
  • they can vote on dissolution
  • elect B o D
  • receive dividend when declared
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2
Q

consolidations, mergers and dissolutions are al fundamental change s that require what

A

shareholder approval

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3
Q

Can you purchase anoretic corporation stock without shareholder approval

A

Yes you can

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4
Q

What must a limited liability partnership have

A

They must have at leave 1 general partner - must have a driver

The general partner has UNLIMITED liability

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5
Q

Does a limited partner have unlimited liability

A

They are passive investors so their liability is limited generally to the amount they have invested

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6
Q

Can a partner be a creditor

A

Yes they can be a creditor eater secured or unsecured

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7
Q

Can a general partner also be a limited partner

A

Yes they can - this means that they can share in the profits and losses

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8
Q

What are the main points of a general partnership

A
  • two or more persons working as co-owners
  • parters are personally liable for business debts
  • profits flow through to individual partners
  • nothing formal is required to set up
  • there is unlimited personal general liability of rte partner s
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9
Q

What is the most popular form of business in US

A

Sole proprietorship

  • no formal set up
  • may need licenses
  • Disadvantage - the individual has unlimited personal liability
  • no formal process for termination
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10
Q

What is UPA and RUPA

A

UPA _ provisions for partnerships

RUPA - revised version - procedures for forming, operation, and termination of partnerships

It is the authority when there is no specifics in the partnership agreement

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11
Q

Can B o D issue corporate debt securities

A

NO - this is the job of the officers, not directors

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12
Q

What can the B of D do

A
  • Declare dividends
  • Issue Stock
  • Repurchase stock
  • Select the Officers
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13
Q

What is a voting trust

A

This is a device where shareholder agree to give their stock to a trustee who has the legal title and therefore all of the voting rights

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14
Q

What is a proxy

A

This is when a shareholder authorizes an age to vote their shares at a meeting

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15
Q

What is cumulative voting

A

this is when all available votes are used for one B of D candidate

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16
Q

What is a shareholder advance agreement

A

This is an agreement among shareholders to vote their share in a specific manner

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17
Q

What are LLP people called

A

general partners

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18
Q

What are LLC members called

A

members

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19
Q

What requires unanimous consent in partnership

A
  • admission of a partner
  • guaranteeing third party debts ( surety ship)
  • admitting or submitting a legal claim
  • sale of partnership property
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20
Q

What does not require unanimous consent

A
  • dissolution of the partnership
21
Q

What is one of the key advantages to a LLC

A

You can participate in management, and have limited liability

  • you liability is limited to your investment in the business
  • you are NOT limited for your own negligence and malpractice
22
Q

What are the liabilities of an LLP

A
  • In a LLP - you are protected from eh malpractice and negligence of others, but you are still obligated of the contractual debts of the business
23
Q

Can a corp indemnify its officers for liability incurred in a suit by stockholders

A

Yes - under RMBCA you can

24
Q

Do officers have to own stock of a company

A

no - they don’t

25
Q

Does general partnership have to file a certificate

A

Yes they do

26
Q

If one company absorbs another - what must be done

A

The stockholder of both companies must be given due notice of a special meeting and a summary of the merger plans

Do NOT need unanimous votes

27
Q

What can’t a Director or officer do

A
  • earn commission on sale s of corp property
  • purchase controlling interest in a competitor co
  • take personal advantage in a n opportunity offered to the company
28
Q

mergers and consolidations normally require what

A

The support of the majority of both boards

an exception is when there is a merger of a subsidiary that tis already 90% owned by the parent

29
Q

what are ultra vires acts

A

These are acts that are beyond the authority of the corporation

When you do this the directors who approved the decision are liable, but this would not extend to shareholders

30
Q

What do you get if you are a participating preferred shareholder

A

When preferred shares are participating, as is the case, preferred shareholders receive a proportionate amount of excess dividends when a higher than normal rate is paid to common shareholders.

31
Q

What does a promoter do

A

they enter into contract on behalf of corporations that have not yet been formed

  • the promoter is personally liable
  • the corporation is not bound until the B of D adopts it
  • the promoter is relieved of the there liability hone released through a novation ( which is one contract is substituted for another) when the corporation replaces the promote as the obligor ion the contract
32
Q

If you are a partner and want to assign you interest how does this work

A

You can assign profits and losses without the consent of the other partners.

However - the new guy does not have the same rights to participate in management

33
Q

what is a secured creditor

A

A secured creditor is any creditor or lender associated with investment in or issuance of a credit product backed by collateral. Secured creditors have a first order claim on the payouts of a distressed credit investment.

Usually a bank

34
Q

If you are a sub and you are being merged to the parent - what are the dissenters given

A

This is when you own 90% of the other corp.

Does NOT need shareholder approval

Or approval by the board of the suck

The minority shareholders must be offered a right of appraisal if they dissent to the merger

35
Q

What are a shareholders rights

A

They have the right to vote on fundamental changes in the corp structure

dissolution is one of them

consolidations

mergers
-Not the purchase of anoretic corps stock

36
Q

What are cumulative preferred stock holder considered

A

They are considered to be unsecured creditors

37
Q

Does a general partner have fiduciary duty to the limited partnership

A

yes and to the other partners

a limited parter does NOT have a fiduciary duty

38
Q

what are warrants considered

A

equity security

39
Q

What are convertible bonds and debenture bonds considered

A

debt security

40
Q

Under RMBC - when must a corp get a certificate of authority to do business in a state

A

A certificate of existence for a domestic corporation, one incorporated in the state, or a certificate of authorization for a foreign corporation, one incorporated in another state, is to be obtained from the secretary of state to provide conclusive evidence that the domestic or foreign corporation is in existence or is authorized to transact business in the state.

when you have an office in another state qualifies

41
Q

Does a partnership need to have written agreement to be formed

A

no can be oral, written or implied

42
Q

How are partnership percentages allocated

A

unless specifically discussed - it is usually split - including debts

43
Q

What happens when a partner withdrawals from a partnership

A
  • they can - it doe NOT automatically cause dissolution

the remaining partners can decide in 90 days if they want to continue

If withdrawal bring the partner number to 1 then YES dissolve

44
Q

when can a stockholder of a closely held corp be challenged successfully - pierce the corp veil

A

If the stock of a closely-held corporation is issued for less than par value it is considered undercapitalized, and the shareholders acquiring stock below par may be liable for the difference under the watered stock rule.

45
Q

How is a SMLLC treated for tax purposes

A

as a sole proprietorship

46
Q

Does an LLC require an operating agreement

A

no

47
Q

What is the order of payment when a dissolution of a partnership occurs

A

1 - pay creditors
2 - partners to cover loans to partnership
3 - in proportion to partner capital accounts
4 - profits

48
Q

when must a partnership be in writing

A

when the partnership purpose can not be completed in 1 year of formation

49
Q

What is included in article of incorporation

A

a registered agent
name of incorporates
number of authorized shares

REG (31 decks)

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