final flash cards #2

Question 1

Must a general partner inform the limited partners of certain matters before undertaking action?

Answer 1

Under general partnership law, a partner owes the partnership and the other partners a fiduciary duty to exercise its partnership powers for the benefit of the partnership and not for itself alone.

Question 2

Can a general partner dissolve a limited partnership?

Answer 2

A limited partnership will be dissolved by the withdrawal of a general partner unless within 90 days after withdrawal all partners agree in writing to continue the partnership and appoint any necessary general partners.

Question 3

How can a general partner withdraw?

Answer 3

A GP can withdraw at any time by providing written notice to the other partners. However, if the withdrawal is in violation of the partnership agreement, the partner will be liable to the partnership for damages caused by its breach of the partnership agreement.

Question 4

What is a limited partners liability?

Answer 4

Generally a limited partner is not liable beyond their contribution for the obligations of the partnership. However, they may be liable beyond their contribution if they participate in control of the business.

Question 5

Will dissolving the partnership expose a limited partner to liability?

Answer 5

No

Question 6

Will voting for the sale of partnership assets expose a limited partner to liability?

Answer 6

No

Question 7

Will removing a GP and appointing a new GP expose a limited partner to liability?

Answer 7

No.

Question 8

Will allowing a GP to remain GP but vote on every action the GP takes expose limited partners to liability?

Answer 8

Yes, because this is participation in control of the business and will expose them to unlimited liability.

Question 9

How do you determine whether to transfer venue?

Answer 9

First, venue must be proper to begin with and if it is, then you decide whether a transfer for convenience should be made.

Question 10

Where is venue proper?

Answer 10

(1) where any defendant resides if all defendants are residents of the state in which the district court sits
(2) A substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated or
(3) Any defendant is subject to the court’s personal jurisdiction with respect to such action, if there is no district anywhere in the US that satisfies 1 and 2

Question 11

When can a case be transferred for convenience?

Answer 11

If original venue was proper, a transfer for the convenience of the parties or witnesses, to another venue in which the action “might have been brought” or to another venue which the parties consented

Question 12

Does the 10th amendment prohibit congress from subjecting states to regulation?

Answer 12

The tenth amendment reserves to the states the powers not granted to the federal government by the Constitution. The amendment is often cited as a limitation on the federal government’s power to regulate the states.

However, the supreme court has held that the tenth amendment does not bar enforcement of a regulation that applies to the states as well as to the private sector.

Question 13

What is the 11th amendment?

Answer 13

Sovereign immunity.

Question 14

Does congress have the power to declare that the 11th amendment does not apply under a particular circumstance?

Answer 14

11th amendment usually bars suits of citizens against their state employee and their agencies.

However, congress can abrogate sovereign immunity when acting under Section 5 of the 14th amendment. (so due process and equal protection).

Cant abrogate under the commerce clause.

Question 15

If a contract is mixed between services and sale of goods what happens?

Answer 15

Predominate purpose test applies

Question 16

What if a single contract has separate payments for the service and the goods?

Answer 16

If the court decides the contract is divisible then it will apply article 2 to the goods portion and the common law to the services portion

Question 17

What is the parol evidence rule?

Answer 17

The parol evidence rule governs whether an oral agreement that predates or is contemporaneous with a written agreement is part of the ensuing contract.

Question 18

What is integration for contract purposes?

Answer 18

When parties to a contract express their agreement in a writing with the intent that that it embody the final expression of their bargain, the writing is an integration.

Any other expressions written or oral-made prior to the writing as well as any oral expressions contemporaneous with the writing, are inadmissible to vary the terms of the writing

Question 19

What determines whether a writing is an integration of all agreements between the parties?

Answer 19

Whether the writing is intended as a final expression and whether the writing is a complete or partial integration.

Question 20

What evidence is admissible to show that a writing for a contract was not final?

Answer 20

Any relevant evidence.

Question 21

After you determine that a writing is final, you must determine whether the integration is complete or only partial.

Answer 21

If the writing is complete the writing may not be contradicted or supplemented. If partial it cannot be contradicted but it may be supplemented by proving up additional terms.

Question 22

Whether an integration is complete or partial depends on…

Answer 22

The intent of the parties…all relevant evidence is admissible to determine whether it is a complete integration or partial

Question 23

What is a merger clause?

Answer 23

A merger clause is a statement in a writing that the agreement is the complete agreement between the parties. This is one factor in determining integration.

Question 24

Under the Parol Evidence rule, what happens if the modification was made after the written agreement?

Answer 24

If the parol evidence rule was made after the agreement then the parol evidence rule will not apply as it only applies to prior or contemporaneous writings.

Question 25

What are a corporation’s rights to issue stock options?

Answer 25

Generally, the BODs has the right to issue options to purchase shares on whatever terms the board chooses.

(ex. board issuing options in exchange for Leslie’s promise to work as CEO)

Question 26

What are options?

Answer 26

Options are the right to purchase shares and do not constitute shares that have been issued.

Question 27

How much stock can a corporation issue?

Answer 27

A corporation can only issue as much stock as the articles of incorporation allow.

Question 28

Can corporations issue stock that have a preference?

Answer 28

No unless the articles allow it.

(how many shares are “authorized” in the facts is the amount that can be issued)

However, they can simply amend their articles

Question 29

What must a corporation do to amend their articles of incorporation?

Answer 29

the BOD must adopt a resolution to amend the articles, then it must send notice to shareholders that a SHs’ meeting will be held to vote on the proposed amendment. The notice must be sent at least 10 days before the meeting. The amendment must be approved by a majority of shares (not shareholders).

Then the articles of amendment must be filed with the state

Question 30

What are preemptive rights?

Answer 30

Preemptive rights are a contractual clause giving a shareholder the right to buy additional shares in any future issue of the company’s common stock before the shares are available to the general public

Question 31

Do shareholders have preemptive rights?

Answer 31

Generally no unless articles provide otherwise.