Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Legal Issues 1 > FINAL > Flashcards

FINAL Flashcards

0
Q

Three reasons why a person would want to incorporate a buisness.

A

Limited Liability
Easier to raise capital
Better succession of ownership

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
1
Q

Define Corporation

A

A separate legal entity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Three pieces of information needed to incorporate a buisness.

A

Name
Purpose
Structure of capital

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Define domestic corporation

A

An instate corporatino

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Define foreign corporation

A

A corporation authorized to do business in a state but not incorporated in the state

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Define close corporation

A

Hard to get ownership in corporatino

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What is an Eleemosynary corporation?

A

Not for profit

Profit stays within corporation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Define Subchapter S corporation

A

A corporation taxed like a partnership

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Define treasury stock

A

Stock that has been bought by the corporation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Does treasury stock vote and pay dividends?

A

No

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Why would a company want to buy treasury stock?

A

To avoid paying dividends

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Define ultra vires act

A

Something that goes beyond the authority of the corporation
Would put the corporation at risk of “piercing the veil”
Anything illegal is an ultra fires act

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What is the reasonable business judgment rule?

A

Protects board members so long as they do not do anything illegal

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Define prospectus

A

A pamphlet/magazine/catalog that is distributed to new shareholders that should answer all legitimate questions about the corporation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Define bond

A

A long term debt

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Why would a company sell stock instead of bonds?

A

Interest must be paid on bonds

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Properties of stock

A

Not tax deductible
Votes
Dividend is not guaranteed

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Properties of bonds

A

Interest is tax deductible
No vote
At maturity the payment is gone

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Properties of common stock

A

Votes

Generally Less expensive

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Properties of preferred stock

A

Paid first generally more expensive

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

What is cumulative preferred stock?

A

Stock where the unpaid dividend accumulates

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Define participating preferred stock

A

Votes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Define convertible preferred stock

A

Con convert into common stock

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Define preemptive right

A

Before a corporation offers new shares to public, shares must be offered in to all owners in order for them to maintain their percentage

24
Q

Define proxy

A

A representative who you give your voting rights

25
Q

When is cumulative voting allowed

A

To elect a new board of directors

26
Q

Define investment contract

A

Investment of money in a common enterprise with the expectation of future profit off the work of someone else

27
Q

What is the purpose of the securities act of 1933

A

Full disclosure

28
Q

Which market is the Securities Act of 1933?

A

Primary market

29
Q

What are two issues of stock exempt from the Securities Act of 1933?

A

Short-term investments

Intrastate issues

30
Q

What is the purpose of the Securities Exchange Act of 1934?

A

Fraud Prevention

31
Q

Which market is the Securities Exchange Act of 1934 in?

A

Secondary

32
Q

What is an accredited investor?

A

Buyer who is on an equal level with the buyer

33
Q

What is the purpose of Sarbanes-Oxley?

A

Have the chief officers sign off on financial statements to protect investors

34
Q

Define insider trading

A

Trading on information not known to the general public

35
Q

What is short swing profit?

A

A profit on a stock that occurred in less than 6 months by an officer/director/large shareholder and is assumed to be insider trading

36
Q

Define secured transaction

A

A transaction that has a security interest

37
Q

Define collateral

A

Property that is subject to the lien

38
Q

What are three things needed for attachment to take place?

A

Security agreement
Value
Debtor has rights in collateral

39
Q

Define perfected security interest

A

A security interest that gives certain rights to the creditor

40
Q

Define right to redemption

A

Previous owner of foreclosed property has first right to buy back the property

41
Q

Define financing statement

A

The financial statements of a company

42
Q

In what order is post disposition accounting paid?

A

Expenses
Debt
Other debts
Excess to debtor

43
Q

Define Surityship

A

An agency relationship

44
Q

Define Right of Subrogation

A

Gives the surety all the rights of the creditor

45
Q

Who is entitled to a mechanic’s lien?

A

The person who supplied labor or materials

46
Q

Define agency

A

Where one party represents another party

47
Q

What is the difference between an independent contractor and an agent?

A

Agent: employed by company and more control

Independent contractor: given a job and less control

48
Q

Why type of relationship does a principal have toward an agent?

A

Fiduciary

49
Q

Define power of attorney

A

A written agency agreement

50
Q

What is the purpose of the uniform durable power of attorney act?

A

Makes a durable power of attorney last beyond death or mental incompetence

51
Q

Define vicarious liability

A

When you are liable for someone else’s actions

52
Q

Define Partnership

A

Where two or more people join in business to make a profit

53
Q

How is a partnership taxed by the federal government?

A

A partnership is a pass through organization

54
Q

What is a 1065?

A

An informational tax return

55
Q

What is a K-1?

A

A tax return like a W2 but for a business owner

56
Q

When a partnership is terminated, how are the assets distributed?

A

Liabilities to non-partners
Refund advances
Return capital
Excess profits to partners

57
Q

What is joint and several liability?

A

A lawsuit can get the money from any or all party members

58
Q

Define limited partnership

A

At least 1 general partner

At least 1 limited partner

Legal Issues 1 (2 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions