Law 2 Flashcards
1
Q
In most cases, what do limited partners contributed in return for a share of the profits?
A
Money, services, and property
2
Q
A limited partner’s liability is limited to what?
A
Actual contribuations to the limited partnership
3
Q
Order of dissolving a LP’s assets under RULPA?
A
Creditors, partner’s accrued profits, partner’s contribution, any profits left
4
Q
A franshisee may be either an ______________ or a ________________________?
A
Agent or independent contractor
5
Q
Product distributorships, business format systems, and manufacturing are involved in what type of business organization?
A
Franchise
6
Q
What does the RULPA stand for?
A
Revised Uniform Limited Partnership Act
7
Q
For legal purposes a corporation is a
A
Person
8
Q
A corporation is created by _______________ and is granted a charter, usually by the _______________
A
Statutes, states
9
Q
A corporation is liable for its
A
Debts
10
Q
A corporation is usually granted _____________ existence
A
Perpetual
11
Q
Where limited liability of shareholders is lost is rare, occurs in instances where corporate structure is ignored by shareholders
A
Piercing the corporate veil
12
Q
A corporation is grante dthrough the grant of a
A
Charter
13
Q
A charter is prepared by the ______________; it is approved and certified by the _____________
A
Corporation, state
14
Q
Imperfectly created corporation
A
a de facto corporation
15
Q
A corporation formed in accordance with all the requirements of the law
A
De Jure Corporation
16
Q
Most corporations are created under ______________ law
A
State
17
Q
A corporation is ____________________ in the state of incorporation and ________________ in all other states, even if it is doing business in that state
A
Domestic, foreign
18
Q
Professional corporations are created strictly for ______________ and do not have the general attributes of a corporation
A
Tax sheltering
19
Q
Corporation income is
A
Double taxed on income and again as shareholder dividends
20
Q
S Corps are not
A
Double taxed
21
Q
Grant of corporate existence
A
Charter
22
Q
A charter usually contains
A
Incorporators, name of corp, corp address, duration, purpose, capital structure, internal organization
23
Q
What detailed rules adopted by the BOD of a corporation do not have to be approved by the state?
A
Elections, dividends, operation of the BOD, quorum and voting requirements, places of meetings
24
Q
What is Ultra Vires Doctrine?
A
Beyond the powers-share holders could bring suit against management/BOD for acting beyond the scope of the charter
25
A corporation must register to do business in
Any other state other than its incorporation
26
Shareholders are
The ownwers of the corporation
27
Who elects the directors of a corporation?
Shareholders
28
What do the directors of a corporation do?
Oversees management (officers)
29
What do the officers of a corporation do?
Manage the day to day business and operations of a corporation
30
Shareholder owners have the right to vote on
Election of directors
31
Shareholder owners have the right to
Control major charter amendements, approve mergers and consolidations, and sell assets
32
The BOD has a
Fudiciary duty to the corporation
33
What is the Business Judgement Rule (BJR)?
Attend meetings, remains appraised of corporate business, and not engage in self-dealing or conflict of interest
34
Officers of a corporation are named and hired by who?
Board of directors
35
Termination of a corporation is achieve by what?
Dissolution
36
What are the three sources of corporate funds?
Debt, equity, and retained earnings
37
Notes, bonds, debentures issued with covenants
Debt
38
Commons shares or perferred shares
Equity
39
Has preference to dividends and liquidation assets
Preferred shares
40
Cash retained in the business for investment
Retained earnings
41
What is the decision of the BOD and not subject to stock holder question?
Dividend
42
Payments of dividends may be
Cash or other property or assets
43
Payments of dividends cannot be paid if
Corporation is insolvent
44
Most states require a dividend to be paid from
Earned surplus
45
What sets the minimum sales price of a share
Par value
46
Share transferred without designating the trasnferee by name
Street certificate
47
What act requires registration of securities and full disclosure to the public concerning the securities being offered for sale?
The Securities Act of 1933
48
Allows simpliefied registration of securities but is not available to companies issueing oil, gas, and mineral rights
Regulation A (Small Public Offerings)
49
What regulation covers all oil and gas securities?
Regulation B
50
What does the 1933 act not cover?
Securities except by statute (ex. Trading transactions, private offerings), securities in issues of limited dollar amounts defined byt the SEC
51
What act was concerned with the existing securities in the marketplace?
The Securities Act of 1934
52
What act established the SEC to administer the 1933 act
The securities act of 1934
53
The Securities Act of 1934 regulates
Stock exchanges, brokers, dealers and the registration of traded securities
54
State statutes are similar to SEC act of 1933 and requires full disclosure registration and statutory prospectus
Blue Sky Laws
55
Private offerings (generally less than 25 people) are not
Subject to registration requirements under state law
56
The burden of proof is on the accountant to prove non-negligence is called
Civil Liability
57
Criminal liablity of an accountant could result in
$10K fine and 5 years in prison
58
Malpractice based on GAAP or GAAS, professional accountant failed to comply with standars, direct and proximate result, plaintiff suffered compensable damages
Common Law Tort Liability
59
Land, whatever is growing or built on the land. Rights associated with ownership and use therof
Real Property
60
All property, tangible and intangible, except real property. Property without a permenent location.
Personal property
61
Delivery of personal property into the care, control and possession of another, without passing title
Bailment
62
Protected expressions of scientific, artistic, or other creative and/or commercial endeavors (trademarks, copyrights, patents)
Intellectual property
63
Subject to physical posession (Car, lamp, book)
Tangible
64
Cannot be physically possesed
Intangible
65
Fixtures that can be removed therefore they do not become a part of real property
Trade fixtures
66
How can title be acquired?
Sales contract, gift, accession, confusion, possession, creation, operation of law.
67
Donative intent and delivery (acceptance assumed)
Gift
68
Addition to the value of the property, increase in value of a car after painting it
Accession
69
Personal property of different owners commingled, fungible goods - oil and grain
Confusion
70
Difference between lost or mislaid and abandonded
Possession
71
Create a painting, write a book
Creation
72
Intestate succession (dying without a ill) or escaheatment - state takes unclaimed property.
Operation of Law
73
Three main types of bailments
Gratuitous bailment, "loan", and bailment of mutual benefit
74
Bailment solely for the benefit of the Bailor, leaving your cat with a friend whilte you vacation. Bailee owes slight degree of care.
Gratuitous bailment
75
Bailment solely for the benefit of the Bailee, loaning your car to a friend. Bailee owes a great degree of care
Loan
76
Valet parking, bailee owes duty of ordinary care. If you keep your keys and park your own car, no bailment exists.
Bailment of mutual benefit
77
Bailments are expressed or implied but can be imposted by law
Constructive bailment
78
Bailments are terminted by
Performance, time, destruction of property, acts of parties, operations of law
79
In the absense of justifiable excuse, the bailee is liable for
Failure to return bailer's property
80
Common Carrier of goods are
Bailees
81
Major forms of joint ownership:
Joint tenancy, tenancy in common, tenancy by the entirety, community property, condominiums
82
Condominiums are always
Real Property
83
Joint tenancy must have what four things in common?
Acquired at the same time, acquired from the same source (title), each have an equal interest, each have the right to posses the whole
84
What type of ownership must have only possession (with no survivorship rights)
Tenancy in common
85
In many non-community property states, similar to joint tenancy but harder to terminate and available only to married couples
Tenancy by the entirety
86
Sale or gift (by delivery of a deed)
Voluntary transfer
87
Includes usual covenants and grantor warrants against title defect arising before or during their ownership
General warranty deeds
88
As above except grantor warrants against title defects while they were the owners
Special warranty deeds
89
Contains no warranty of title but grants whatever rights grantor has to grantee
Quitclaim deeds
90
Sales of realty must be in
Writing
91
Involuntary transfer of real property title can be accomplished by the following?
Foreclosure sale, judgement sale, eminent domain, adverse possession (easement)
92
Transfer by inheritance is a result of transfer by a
Will or intestate succession
93
Use of a natural waterway within the property
Riparian
94
Oil, gas, minerals, and water ownership
Subterranean
95
Neighbor cannot cause damage to your land by actions on their land
Lateral/subjacent support
96
Three main types of possessory interests
Fee simple, life estate, leasehold
97
Absolutely ownership-highest form of ownership and possession
Fee simple
98
Land granted to a university as long as its used for educational purposes is an example of what?
Determinable
99
Land granted to a museum as long as no Picasso is displayed is an example of what?
Subject to condition
100
A person's possessory interest extends to the lifetime of a person
Life estate
101
A type of ownership in which a person cannot transfer the rights to another beyond their lifetime
Life estate
102
A person's possessory interest extends for a specific period of time, they do not have title
Leasehold
103
Three major types of non-possessory interest?
Easement, profits, licesnses
104
The right to use another person's property?
Easement
105
The right to obtain a possessory interest in another's land (crops, minerals)?
Profits
106
Owner permits someone to use land for a specific purpse (hunting, hiking). Subject to be revoked at any time
Licenses
107
Owner may be a ________________ putting the possession in hands of the ______________
Tenant
108
Rental agreement
The lease
109
Four types of leaseholds are
Estates for years, periodic tenancies, tenancies at will, tenancies at sufferance
110
Leasehold with a definate period of time
Estates for years
111
Usually month to month, renewing until contrary notice is given
Periodic Tenancies
112
Either party can end lease at any time, most states require termination notice
Tenancies at will
113
Tenancy continues after lease expires, most jurisdictions hold this comes period tenancy
Tenancies at sufferance
114
Most leases contain
Implied covenants
115
Leases can be terminated by
Expiration of time, frustration of purpose, tenant has breached covenants, constructive eviction
116
Arising from creative endeavors of the human mind, such as literary works, computer software, music
Intellectual property
117
Inventions, designs, manufacturing processes, machinery, electronics, chemical compounds
Patents
118
A patent, when granted, last for __________ years from the date of filed application
20 years
119
Design patents, dealing only with appearance, last for
14 years
120
To be patented, something must be
novel, useful and non-obvious
121
A patent is excusively
Federal
122
A parents must not have been place in public use within the
Previous year and never internationally
123
An exclusive right to make, use and sell a new and usefyl process or thing
Patent
124
Exclusive right to print, reproduce, sell and exhibit written material, photots, movies, data systems
Copyrights
125
A copyright must be the creator's (author's)
original work
126
A copyright must be in a
Tangible meduim of expression (written, saved on a disk)
127
A copyright last for the life or the creator plus how many years?
70 years
128
A corporate copyright last for
95 years
129
A copyright begins when the original works is placed on a
Meduim of expression
130
Names, familiar phrases, a complication of facts are
Non-copyrightable things
131
Copyright protects the _____________________ of ideas but not the idea itself
Expression
132
Limited reproduction for classroom use
Fair use copyright exception
133
Employees hired to invent or write for an employer hold no patent or copyright interest in the resulting work
Shop Rights Doctrine
134
Act that granted copyright protection to the expression of computer programs
Computer Programs Software Act
135
What does the Computer Programs Software Act do?
Prohibits copying but not indenpendently coming up with a program that performs the same function
136
A distinctive symbol, word, letter, picture, color or combination used by a merchant to ientify their goods
Trademark
137
Packaging or dressing a product as it relates to a business' overall marketplace image
Trade dress
138
Employee owes a duty to employer to protect processes, information, ect that could give them a compettive economic benefit
Trade secrets
139
Using computers to embezzle, defraud, or steal information
Computer crimes and torts
140
Computer poses a problem with an individuals right to privacy
Privacy issues
141
The owner of property owns property to the core of the earth to the Heavens.
The Ad Coelum Doctrine
142
There is no liability to a property owner for oil and gas from his well that has drained from a neighboring property
The Rule of Capture
143
Capture rule was developed to
Encourage oil and gas exploration
144
Limits on the the rule of capture
Escaped hydrocarbons, drainage by enhanced recovery
145
Water injection and secondary recovery techniques entitles owner of property to keep production even if it was swept from under someone elses land
Drainage by enhanced recovery
146
When oil and gas is retrieved from the earth, it becomes the property of the owner that first pumped it, even if it is re-injected and some of that is retrieved by another well owned by someone else
Escaped hydrocarbons
147
Doctrine that holds that each person has the right to produce from a formation has the right to do so. If another damages the formation, they are liable
Doctrine of Correclative Rights
148
Attempt to prevent property owners drilling close to their boundary in greed
Conservation laws
149
Owner drills and produces as fast as they can to maximize their profit, leading to a waste in long term production as the field is not drained efficiently due to the capture rule
Economic and physical waste
150
A doctrine created to avoid physical and economic waste of oil and gas resources and to protect an owners correlative right
Fair share doctrine
151
Prevents drilling too many wells and excessive drainage from a neighbor
Well-spacing rules
152
Rules that are needed because formations are not always circular or faults/formation characteristics prevent fair allocation of resources
Well-spacing exceptions
153
Sets producton limits to minimize waste and protect correlative rights
Production allowables (prorationing rules)
154
Limits that help keep pressure in the field
Gas/oil ratio
155
Forcing (or voluntary) sharing of production of a field no matter what well it is produced from, extends rational field development
Unitization
156
Small tracts of odds shape can excule mineral owner from drilling because of spacing rules
The small-tract problem
157
Owner of oil and gas does not own until captured by a well, there exist only a right to explor and retrieve
Non-ownership
158
Since minerals are part of the soil, it's owner (as well as right to develop)
Ownership-in-place
159
The right of possession of the land (oil and gas in the ground)
Corporeal
160
The right to only use the land (right only when it is produced)
Incorporeal
161
Type of interest that both the surface and mineral rights are both owned
Fee interest
162
Surface and mineral rights can be "severed" into tow. Either the sale of surface or the sale (grant) of minerals.
Mineral interest
163
Mineral interest includes the right to
Use the surface
164
Mineral interest ownership are entitled to the following:
Right to profits and obligation for costs, the right to lease or sell the mineral interest, the right to benefit under an oil and gas lease
165
Under Louisiana code surface and minerals cannot be separated so a mineral servitude can be grated to a holding allowing for the exploration and development rights similar to a severed mineral interest
Louisiana's Mineral Servitude
166
The right to mineral inerest grated by an oil and gas lease (working interest)
Leasehold interest
167
What remains after the mienral interest have been severed is called
Surface interest
168
Sufance interest includes
Portable water, geological formations that could be suitable for gas storage, less suface rights as an easement is granted to the mineral owner
169
A share of production or the share of the proceeds of production, free of costs, when there is prodcuion
Royalty interest
170
Interest retained by the lessor as consideration in an oil and gas lease
Landowners' royalty (lessor's royalty)
171
A royalty the lessee carves out of the leasehold inerest
Over-riding royalty
172
Existed for a specific period of time
Term royalty
173
No right to use surface, not profit-sharing or cost bearing, no right to lease or lease benefits
Characteristics of royalty interest
174
A share of production or value of proceeds free of costs that terminates with an agreed sum has been paid
Production payments (oil payments)
175
Similar to a royalty interest, express as a percentage, but payable only if there is a net profit from the well
Net profits interest
176
A fractional interest free of all or msot of costs to a specified point
Carried interest
177
The carried interest is often carried up to
Casing point
178
Many agreements call for other working interests to recover costs in multiples before the carried interest can be
Backed-in
179
A carried interest is always a
Working interest
180
Trespassing, either drilling on a lease one does not own or slant drilling into another's property
Damage to lease value
181
The owner of a lease that has been damaged by trespassing is entitled to damages in the loss of the value of the
Lease
182
The economic value of a bonus payment comes from the potential for oil and gas
Rational of the remedy
183
Damages in the reduced value of a lease shold be measured as peak value-reduced value, the maximum amount
Measure of damages
184
Malacious pubplication of false statements that injure the plaintiff's title or quality of title
Slander of title
185
Showing that trespasser posseses the property, recorded a lease to cover the owners interest, the lease has expired and the lesser refuses to the release it
False claims
186
Must prove slander was deliberate conduct without reasonable cause
Malacious intent
187
Must show actual loss
Specific damages
188
Owner sues for payment for the right of entry by the trespasser
Assumpsit
189
Final remedy for owner who has suffered trespass is to eject the trespasser and demand compensation for the conversion of oil and gas production
Ejectment and conversion
190
Trespasser loses all right to offset expenses and revenues. He can't even plug and abandon the hole.
Bad-faith trespass
191
Trespasser can recover reasonable or actual costs whichever is lower.
Good faith trespass
192
Transfer of ownership by a presently-operative instrument
By conveyance
193
A conveyance requires 5 formalities
Writing, words of grant, adequate description, designation of the parties, proper execution
194
Oil and gas interest are real property, thus a conveyance must be in _______________ under the Statute of Frauds
Writing
195
A conveyance of an oil and gas interest is usually in the form of a _______________ or __________________
Deed or lease
196
Two types of deeds?
Warranty deed and quitclaim deed
197
Grant the property with up to six covenants (promises) as to title: seisin, right to convey, no encumbrances, warranty, quiet enjoyment, further assurances
Warranty Deed
198
Contains no covenants, grants whatever rights the grantor has with no assurance that they have any rights
Quitclaim deed
199
How are oil and gas leases on printed forms different from real property leases?
Right to use property and remove substance, rights may be perpetual (as long as oil is produced), lessee's rights are not exclusive (surface owner must be considered)
