Business Structures & Sales of Goods Act Flashcards

1
Q

5 types of business structures

A
  • sole proprietorship
  • general partnership
  • limited partnership
  • limited liability partnership
  • incorporation
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2
Q

general partnership

A
  • full liability -joint and several liability
  • partners are agents of the partnership
  • vicarious liability for torts
  • majority rules
    ^ no costs -profits and losses in that year
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3
Q

Partnership Act

A
  • business activity of two or more parties where there is a sharing of risk -profit/loss
  • mere joint ownership of an asset does not create a partnership
  • partnership agreement in writing
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4
Q

window of liability

A
  • liability from the moment you commence as a partner until you cease as partner
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5
Q

termination of a partnership interest happens via ___

A
  • death, bankruptcy, mental incompetency
  • expiry of a preset time
  • completion of a project
  • court order
  • resignation with notice
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6
Q

8 default rules (Partnership Act)

A

(can be overridden by contract aka partnership agreement)

  • partners have an equal obligation to contribute capital
  • no interest payable on capital
  • no remuneration for partners
  • partners have entitlement to profits and losses
  • all partners have equal access to financial records
  • all ordinary business, majority rules
  • all extraordinary business, must be unanimous
  • ——-admitting new partner
  • ——–expelling existing partner
  • indemnification (reimbursement) for disproportionate contribution
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7
Q

limited partnership

A

limited partner has limited liability (LP)

  • registered with the provincial government
  • there must be at least one general partner and at least one limited partnership
  • LP has no say in management
  • name of LP cannot be in the firm name
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8
Q

limited liability partnership

A
  • professional partnership

- no vicarious liability for partnership torts

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9
Q

incorporation

A
  • creates a legal person
  • companies have limited liability
  • ———–income tax -preferred rate -deferral
  • control-flexibility
  • transfer tax
  • reserve a name with approval (can’t be similar to others, good taste)
  • Notice of Articles (rules)
  • Incorporation Agreement
  • Notice of Offices
  • Certificate of Incorporation

/Officers\
/Directors\
/Shareholders\

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10
Q

shareholders

A
  • owners
  • limited liability
  • common shares -basic equity shares (voting)
  • preferred shares -priority to dividends -priority to return on capital (nonvoting)
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11
Q

directors

A
  • decision makers
  • limited liability
  • —–exceptions… -fraud, -statutory exceptions: gst, pst, employer remittances, WCB/wages
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12
Q

officers

A
  • president, secretary
  • implement director’s decisions
  • official signatories
    Limited Liability
    ———-exceptions… -fraud, -statutory exceptions: gst, pst, employer remittances, WCB/wages
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13
Q

duties of directors

A

Fiduciary Duty -obligation of one party to act in the best interest of another
- conflict of interest
- insider trading
Doctrine of Corporate Opportunity

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14
Q

doctrine of corporate opportunity

A
  • principle providing that directors, officers, and controlling shareholders of a corporation must not take for themselves any business opportunity that could benefit the corporation
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15
Q

agency

A
  • the capacity of an actor to act in a given environment

- agent binds principal in a contract (whether the principal likes it or not)`

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16
Q

principal’s duty (to an agent)

A
  • pay

- reimburse expenses (disbursements)

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17
Q

agent’s 8 duties (to a principal)

A

utmost good faith contract

  • obligation to disclose all material facts
  • fiduciary duty
  • ongoing communication
  • obey lawful instructions
  • duty of confidentiality
  • duty to account for funds
  • duty to maintain professional standard
  • duty not to delegate without consent
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18
Q

are they your agent?

A
  • only if you pay them (insurance broker vs stock broker)
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19
Q

agency by express agreement

A
  • created by written or oral agreement between the principal and the agent.
20
Q

agency by conduct

A
  • where the principal’s words or conduct would lead a reasonable person in the third party’s position to believe that the agent was authorized to act
  • principal causes confusion
21
Q

agency by necessity

A
  • created by an emergency arising from a situation making it necessary or proper for the agent to act without receiving the sanction or authorization of the principal
  • perishable goods only
  • unable to contact the principal
22
Q

agency by ratification

A
  • a situation in which a person or company inaccurately claims to be an agent for another person or company and conducts some act in that capacity, but which the principal (who is not actually a principal) later accepts and recognizes
  • retroactively
23
Q

Employee Standards Act (8)

A
  • legislation enacted by the provincial government of British Columbia to protect the rights of working people
  • minimum wage
  • statutory holidays (15 of previous 30 days)
  • vacation pay
    >5 days - 4% - 2 weeks
    >5 years - 6% - 3 weeks
  • overtime
    >40 hours - 1.5x - banking
    48 hours - 2x
  • no waiving rights
  • paid at least twice per month
  • employer may only deduct authorized deductions
  • special clothing (employer provides and cleans at no cost)
24
Q

leave (employee standards act)

A
  • jury
  • maternity - 17 weeks
  • parental - 35 weeks
  • family leave (medical and educational) - 5 days per year
  • bereavement - 3 days
25
Q

termination for cause (firing)

A
  • pay current
  • no severance

[1] Misconduct or Dishonesty
- one significant provable incident

[2] Disobedience
- repetition - documentation

[3] Incompetence
- repetition - documentation - remediation

[4] Sickness (unable to work)
- employer has duty of accomodation

26
Q

termination without cause (layoff)

A

notice or pay in lieu of notice - severance pay

< 3 months - no notice
> 3 months –> 1 year - 1 weeks' notice
1 year –>  < 3 years - 2 weeks' notice
3 years - 3 weeks' notice
4 years - 4 weeks' notice
8+ years - 8 weeks' notice
27
Q

bailment

A
  • an act of delivering goods to a bailee for a particular purpose, without transfer of ownership
bailor = owner
bailee = possessor
28
Q

gratuitous bailment for the benefit of the bailor

A
  • level of care that a reasonable person takes of their own goods
29
Q

bailment for reward / bailment for value

A
  • industrial standard
30
Q

gratuitous bailment for the benefit of the bailee

A
  • all reasonable precaution
31
Q

vendor’s lien

A
  • retains, prevents possession
32
Q

how do you identify if someone is an employee

A
  • if they under the direction and control of an employer
33
Q

Sales of Goods Act - Rule 1

- unconditional contract for the sale of specific goods in a deliverable state

A

unconditional contract for the sale of specific goods in a deliverable state

  • title transfers at contract
34
Q

Sales of Goods Act - Rule 2
- unconditional contract for the sale of specific goods NOT
in deliverable state

A

unconditional contract for the sale of specific goods NOT
in deliverable state

  • title transfers when put in a deliverable state and buyer is notified
35
Q

Sales of Goods Act - Rule 3

-unconditional contract, sale of specific goods requires weighing, grading, or testing

A

unconditional contract, sale of specific goods requires weighing, grading, or testing

  • title transfers when done and buyer is notified
36
Q

Sales of Goods Act - Rule 4

- goods on approval

A

goods on approval

  • title transfers, when:
    a) when the buyer approves
    b) when a preset or reasonable time elapses
37
Q

Sales of Goods Act - Rule 5

- unascertained and future goods

A

unascertained and future goods

  • title transfers:
    1) when good is allocated or set aside (identified)
    and
    2) a) buyer assents (agrees)
    b) good is delivered to third party courier
38
Q

caveat emptor

A
  • “let the buyer beware”

- obligation on buyer to investigate

39
Q

conditions

A
  • essential term in a contract

if breached, entitled to DISCHARGE and DAMAGES

40
Q

warranties

A
  • a non-essential term in a contract

if breached, entitled to DAMAGES

41
Q

implied conditions (5)

A
  • goods sold by sample will comply with sample
  • goods sold by description will comply with the description and be of merchantable quality
  • fitness for purposes
  • ——–buyer identifies needs to seller then relies on sellers advice
  • time for delivery
  • right to sell (if you own it)
42
Q

payment must be a __________

43
Q

Personal Property Security Act (PPSA)

A
  • governs whenever you have loans on personal items

Online registry: Personal Property Security Registry (PPSR)

44
Q

Specific Security Agreement

A
  • documents where someone who owes money pledges
  • specific listed assets
  • traceable
45
Q

General Security Agreement

A
  • pledge of all assets

DEMAND- Crystallization of what is owned by the debtor on the day of DEMAND

46
Q

Realizing Security (5 steps)

A
#1: Notice of Intention Realize Security
#2: Seizure by Bailiff
#3: 21 day redemption period
#4: Bailiff’s sale - cost debets, interest, surplus to owner, shortfall = the owner is responsible
#5: Exception: seize or sue rule - consumer items only