Chapter 5: Important Points Flashcards
IP The UCC (Uniform Commercial Code)
A state statute enacted to simplify, clarify and modernize the laws governing commercial transactions.
IP The US Constitution
The supreme law of our country. Federal, state or local laws that conflict with this are unenforceable.
IP Negotiable Instrument
An unconditional promise or oder to pay a fixed amount with or without interest. It must satisfy the requirements of negotiability defined in UCC Article 3.
IP Negotiable Instruments include
Checks and drafts, (three-party instruments) as well as promissory notes and certificates (two-party instruments).
IP Negotiable Instruments must comply with the following:
Be in writing, be signed, contain an order or promise to pay a fixed sum of money, and be payable on demand or by a definite date. If no date is specified, it is payable on demand.
IP Indorsement
A signature other than a maker, drawee or an acceptor that is placed on an instrument to negotiate (or transfer) it to another person.
IP Holder in Due Course
One who takes a negotiable instrument for value, in good faith and without notice that it is defective.
IP Partnership
A form of business organization that is owned by two or more partners and created by contract between the partners.
IP General Partnership
The partners are personably liable for partnership debts exceeding partnership assets. Partners are jointly (together) and severally (separately) liable for these debts. A limited partnership consists of one or more general partners who are jointly and severally liable, and one or more silent or limited partners who contribute money or other assets of value to the extent of their ownership interest.
IP Corporation
A taxable legal entity recognized by law, with tax rates separate from individual income tax rates. These have the power to receive, hold, and convey title to real property. Shareholders are owners of the corporation to the extent of their shareholdings.
Subchapter S Corporation
A type of corporate organization that is permitted to function as a corporation but is taxed as a partnership.
IP C Corporation
Must pay corporate income tax to the IRS and the shareholders are also taxed on their dividends that are profits of the corporation. Therefore, a double tax is paid at the corporate level and the shareholder level.
IP Securities Act of 1933
Regulates securities offered by corporations, general or limited partnerships, unincorporated associations, or individuals.
IP Organizations Offering Securities
Must register with the Securities Exchange Commission (SEC) . Registration includes a registration statement and prospectus.
IP Securities that do not involve a public offering
Are exempt from the SEC registration requirement. This exemption is known as Private Placement Exemption
IP Shares of Stock in Private Offering
No more than 35 non-accredited investors may purchase these. Advertising to the public is not permitted.
IP Companies Offering Securities To the Public
Must register with the Department of Laws, including an offering of plans to sell condominiums or cooperatives.
IP Real Estate Investment Trusts (REITs)
Allow small investors to pool their money to participate in larger real estate transactions. These make financing available for large real estate developments.
IP US Supreme Court
The nation’s highest court. It is composed of nine justices appointed by the President with the approval of the Senate.
IP Federal Court System
Includes federal trial courts. There is at least one federal district court in each state.
IP Special Federal Courts Hear Only Certain Types of Lawsuits
US Tax Court, US Claims Court, US Court of International Trade and the US Bankruptcy Court.
IP US Court of Appeals
The federal court system’s intermediate appellate courts. There are 13 circuits in the federal court system. Curcuits refer to the areas where the court serves.
IP The Unified Court System in New York
Composed of city, town, and village courts; county courts include county court, family court, and surrogate’s court.
IP New York Supreme Court
Hears civil cases and the New York Supreme Court appellate division reviews cases fro the Supreme Court and county courts as well as administrative board such as the Worker’s Compensation Board. The court of appeals is the highest court in the state.
