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Legal Enviornment Of Business > Final Exam > Flashcards

Final Exam Flashcards

1
Q

What is White-collar Crime?

A

Violations of the law by business organizations or individuals in a business-related capacity, committed to obtain money, property, or services, avoid payment, or achieve personal or business advantage.

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2
Q

How are crimes classified?

A

Crimes are classified as felonies or misdemeanors.

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3
Q

Define Felonies.

A

A criminal offense of a serious nature, generally punishable by fine and/or imprisonment in a penitentiary (imprisonment more than one year).

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4
Q

Define Misdemeanors.

A

A criminal offense of less serious nature than a felony, generally punishable by fine or jail sentence other than in a penitentiary (imprisonment less than one year).

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5
Q

What initiates felony cases?

A

Felony cases are commenced by a grand jury indictment.

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6
Q

What is an Indictment?

A

A document issued by a grand jury formally charging a person with a felony.

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7
Q

What is an Information?

A

A written accusation by the prosecutor presented in court charging an accused person with a crime.

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8
Q

What role does a grand jury play?

A

A grand jury determines if there is sufficient evidence to warrant a trial.

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9
Q

What is the role of a petit jury?

A

A petit jury determines the guilt or innocence of the accused.

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10
Q

Define Intent in criminal law.

A

A legal doctrine indicating that parties meant to do what they did.

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11
Q

What does Willfully mean?

A

When intent to defraud or deceive is present, indicating voluntary and purposeful action.

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12
Q

What is Knowingly in the context of a crime?

A

Intentionally acting with knowledge that cannot be established by negligence, but inferred from deliberate ignorance.

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13
Q

What are the three pleas a defendant can enter?

A

Guilty, Not Guilty, or Nolo Contendere.

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14
Q

What does Nolo Contendere mean?

A

A plea that neither admits nor denies the crime but allows the court to treat the defendant as guilty.

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15
Q

What does the Fifth Amendment protect against?

A

It protects against self-incrimination and requires an indictment before trial for capital crimes.

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16
Q

What is Probable Cause?

A

The reasonable basis on which law enforcement convinces a judge that criminal activity has occurred.

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17
Q

What is the Presumption of Innocence?

A

The requirement that the government must prove a criminal defendant’s guilt beyond a reasonable doubt.

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18
Q

What does the Fourth Amendment protect against?

A

It protects against unreasonable search and seizure by requiring a valid search warrant.

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19
Q

Define Unreasonable Search and Seizure.

A

A violation of the Fourth Amendment that occurs when a valid search warrant is not obtained or exceeded.

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20
Q

What is a Search Warrant?

A

A court order required prior to private property being searched or seized.

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21
Q

What is the expectation of privacy?

A

The expectation that one will not be observed by the state.

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22
Q

What does the Fifth Amendment say about Double Jeopardy?

A

It prohibits an individual from being prosecuted twice by the same governing body for the same offense.

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23
Q

What is the Sixth Amendment?

A

It provides rights in a criminal case, including the right to a speedy trial, trial by jury, and assistance of an attorney.

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24
Q

What does the Eighth Amendment prohibit?

A

It prohibits excessive bail, excessive fines, and cruel and unusual punishment.

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25
Q

Define Fraud.

A

A false representation of fact made with intent to deceive another that is justifiably relied upon to that person’s injury.

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26
Q

What constitutes Theft by Deception?

A

Creating or reinforcing a false impression or failing to disclose a known lien in a confidential relationship.

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27
Q

What is Mail Fraud?

A

Using the U.S. Postal Service to conduct fraudulent activities with the intent to deprive an owner of property.

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28
Q

What is Wire Fraud?

A

Using electronic means of communication to conduct fraudulent activities with the intent to deprive an owner of property.

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29
Q

What is Securities Fraud?

A

Fraud in the purchase or sale of a security, primarily defined by the Securities Exchange Act of 1934.

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30
Q

What is Health Care Fraud?

A

False claims under the False Claims Act, such as billing for services not performed or falsifying diagnoses.

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31
Q

What is Counterfeiting?

A

The use of counterfeit access devices to initiate a transfer of funds.

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32
Q

What is Bankruptcy Fraud?

A

Falsification of documents filed in bankruptcy cases, including concealment of property.

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33
Q

Define Conspiracy.

A

A combination or agreement between two or more persons for the commission of a criminal act.

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34
Q

What is Obstruction of Justice?

A

A criminal act involving interference with the administration of laws during investigations and trials.

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35
Q

What is a False Statement to a Bank?

A

Willfully making a false statement to a federally insured financial institution.

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36
Q

What is a False Statement to a Federal Agency?

A

Willfully or knowingly making a false or fraudulent statement to a department or agency of the United States.

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37
Q

Define Larceny.

A

The unlawful taking of personal property with the intent to deprive the rightful owner of this property.

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38
Q

What is the difference between Larceny and Robbery?

A

Larceny is theft without force, while robbery involves illegally taking something by force.

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39
Q

How is Larceny commonly referred to?

A

Theft or stealing.

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40
Q

What is Burglary?

A

Theft by breaking and entering.

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41
Q

What is Money Laundering?

A

Falsely reporting income obtained through criminal activity as income obtained through a legitimate business enterprise.

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42
Q

What is the Racketeer Influenced and Corrupt Organization Act (RICO)?

A

A law imposing criminal and civil liability upon businesspersons engaging in prohibited activities in interstate commerce.

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43
Q

What does a ‘Pattern of Racketeering’ under RICO entail?

A

Two or more similar acts of organized crime in a ten-year period.

44
Q

Define Cyber Crime.

A

A significant trend in criminal law resulting from the rapid increase of the internet.

45
Q

What is Endangerment of Workers?

A

A criminal act that involves placing employees at risk concerning their health and safety in the work environment.

46
Q

What does Aiding and Abetting mean?

A

A criminal action arising from association with and assistance rendered to a person guilty of another criminal act.

47
Q

What is the role of an Accessory in criminal law?

A

An accessory assists in preparation for a crime or helps after the crime has been committed.

48
Q

What is Bribery?

A

The offering, receiving, or soliciting of something of value to influence an official’s action.

49
Q

What is the Foreign Corrupt Practices Act (FCPA)?

A

A U.S. law banning the payment of bribes to foreign officials to obtain business.

50
Q

What are Sentencing Guidelines?

A

Standards adopted by the U.S. Sentencing Commission to standardize sentences for similar crimes.

51
Q

What are the three basic forms of business organizations?

A
  • Sole Proprietorships
  • Partnerships
  • Corporations
52
Q

Define Closely Held organization.

A

An organization owned by only a few people.

53
Q

Define Publicly Held organization.

A

A business organization with hundreds or thousands of owners who can exchange ownership interests on public exchanges.

54
Q

What are the significant factors to consider when selecting a business’s organizational form?

A
  • Cost of creating the organization
  • Continuity or stability of the organization
  • Control of decisions
  • Personal liability of the owners
  • Taxation of the organization’s earnings
55
Q

What does the term ‘Creation’ refer to in business organizations?

A

The legal steps necessary to form a particular business organization.

56
Q

What does Continuity refer to in the context of business organizations?

A

The stability or durability of the organization, including how it can be dissolved.

57
Q

What is Dissolution?

A

The cancellation of an agreement, rescinding its binding force.

58
Q

What is a Sole Proprietorship?

A

The simplest form of business organization, created and controlled by one owner.

59
Q

What is the main advantage of a Sole Proprietorship regarding creation?

A

It is the easiest and least expensive business organization to create.

60
Q

How is the continuity of a Sole Proprietorship tied?

A

Directly to the will of the proprietor.

61
Q

What is the liability of a Sole Proprietor?

A

Unlimited liability for the debts of the proprietorship.

62
Q

How are Sole Proprietorships taxed?

A

Not taxed as an organization; income is attributed to the proprietor.

63
Q

Define Partnership.

A

A business organization involving two or more persons agreeing to conduct a commercial venture while sharing profits and losses.

64
Q

What is a key requirement for forming a Partnership?

A
  • Two or more persons
  • A common interest in business
  • Sharing profits and losses
65
Q

What happens to a general partnership upon a change in partners?

A

It is dissolved.

66
Q

What is the liability structure in a general Partnership?

A

All partners have unlimited liability for the organization’s debts.

67
Q

How are Partnerships taxed?

A

Not a taxable entity; profits are reported on individual partners’ tax returns.

68
Q

What is a Corporation?

A

An artificial, but legal, person created by state law.

69
Q

What distinguishes a Domestic Corporation from a Foreign Corporation?

A

Domestic operates in the state that issued the charter; Foreign operates in states other than the issuing state.

70
Q

What is a Charter?

A

The legal document issued by a state when creating a new corporation.

71
Q

What are Shareholders?

A

The owners of a corporation who vote on major decisions.

72
Q

What is ‘Piercing the Corporate Veil’?

A

A legal doctrine used by courts to hold shareholders personally liable for a corporation’s debts.

73
Q

What is Double Taxation in corporations?

A

When the corporation pays taxes on earnings and shareholders pay taxes on dividends.

74
Q

Define Limited Partners in a Limited Partnership.

A

Owners who forgo control of operations in return for limited liability.

75
Q

What is an S Corporation?

A

A business organization formed as a corporation but treated as a partnership for taxation purposes.

76
Q

What is a Limited Liability Company (LLC)?

A

A business organization with characteristics of both a partnership and a corporation, limiting personal liability to capital contributions.

77
Q

What is the role of a Principal in an agency relationship?

A

The person who gives an agent authority.

78
Q

What is Actual Authority?

A

The authority a principal expressly or implicitly gives to an agent.

79
Q

What does Respondeat Superior refer to?

A

The doctrine imposing liability on one for torts committed by another person in their employ.

80
Q

What is the Business Judgment Rule?

A

A presumption that a corporate director is acting in good faith and with due care in the best interest of the firm.

81
Q

What is a Benefit Corporation?

A

A corporate form that requires ensuring explicit social goals in addition to producing shareholder profits.

82
Q

What is the presumption commonly applied in shareholder derivative suits?

A

It is presumed that directors act in the best interest of the firm unless proven otherwise by showing a breach of fiduciary duty.

83
Q

Define Benefit Corporation.

A

A corporate form that requires ensuring explicit social goals in addition to producing shareholder profits.

84
Q

What is a Security under securities law?

A

An investment in which the investor does not participate in management.

85
Q

List the three questions courts seek positive answers to when determining if a purchase is a security.

A
  • Is the investment in a common business activity?
  • Is the investment based on a reasonable expectation of profits?
  • Will these profits be earned through the efforts of someone other than the investor?
86
Q

What is the role of the Securities and Exchange Commission (SEC)?

A

To regulate the securities industry and enforce securities laws.

87
Q

When was the Securities and Exchange Commission (SEC) created?

A

1934.

88
Q

What does the Securities Act of 1933 regulate?

A

The initial sale of securities to the public through disclosure requirements.

89
Q

What are the three sanctions for violations of the Securities Act of 1933?

A
  • Criminal punishment
  • Civil liability
  • Equitable remedy of an injunction
90
Q

What is an Issuer in securities law?

A

An individual or business organization offering a security for sale to the public.

91
Q

What is a Registration Statement?

A

The legal document required to be filed with the SEC before securities are offered for sale to the public.

92
Q

What must be included in a Registration Statement?

A

A detailed disclosure of financial information about the issuer and controlling individuals.

93
Q

Define Prospectus.

A

The legal document required to be made available to potential purchasers of securities under the 1933 Securities Act.

94
Q

What is the purpose of a Tombstone Ad?

A

To announce the public offering of securities during the waiting period.

95
Q

True or False: Civil liability under the 1933 Act usually involves a buyer suing for a refund of the investment.

A

True.

96
Q

What does Section 11 of the Securities Act of 1933 deal with?

A

Registration statements and imposes liability on signers and directors for misleading statements.

97
Q

What is the basic period for the statute of limitations under the Securities Act of 1933?

A

One year.

98
Q

What is Due Diligence in the context of the Securities Act of 1933?

A

A defense that experts may assert involving a reasonable investigation into available information.

99
Q

What does the Private Securities Litigation Reform Act of 1995 (PSLRA) limit?

A

The recovery for securities violations against third parties not directly responsible for the violation.

100
Q

Define Blue Sky Laws.

A

Securities law enacted by states to regulate the securities industry.

101
Q

What is the Sarbanes-Oxley Act of 2002 aimed at?

A

Correcting inadequacies in laws that allowed for corporate fraud.

102
Q

What is the Public Company Accounting Oversight Board (PCAOB)?

A

A board established by the Sarbanes-Oxley Act to oversee the audits of public companies.

103
Q

What is a key requirement of the Sarbanes-Oxley Act regarding financial statements?

A

CEOs and CFOs must certify the accuracy of quarterly and annual financial statements.

104
Q

What is the purpose of the Dodd-Frank Wall Street Reform and Consumer Protection Act?

A

To address multiple issues of financial reform and create new regulatory agencies.

105
Q

What does the JOBS Act of 2012 promote?

A

Eases federal regulation of initial public offerings to encourage investment in start-ups.

106
Q

Fill in the blank: The _______ Act allows companies to raise money from accredited investors using the Internet.

A

[JOBS]

Legal Enviornment Of Business (3 decks)

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