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NY BAR REVIEW > NY BAR REVIEW BUSINESS RLTSHP 2 > Flashcards

NY BAR REVIEW BUSINESS RLTSHP 2 Flashcards

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1
Q

LLC

A

not personally liable

tax benefits of partnership

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2
Q

formation of LLC

A

articles or organization filed w NY dept of state
name
county
purpose
date of dissolution
ny sec of state is agent for service of process
at least 1 member

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3
Q

failure to file proof of publication

A

penalty

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4
Q

operating agreement for LLC

A

before at time of or within 90 days of formation
operation of the business
conduct of affairs
rights, powers, preferences, limitations of members, managers responsibility
may be amended, but with consent of the member
may eliminate or limit liability of managers and members for damages for breach of duty of care, NOT for acts/omissions in bad faith, or intentional misconduct/violation of law, personal financial gain, wasn’t legally entitled to.
BREACH OF DUTY OF CARE v. BREACH OF LOYALTY

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5
Q

manager/management in LLC voted

A

members’ vote is proportionate to profits

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6
Q

management typically by what type of vote in LLC?

A

majority

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7
Q

PROFESSIONAL service LLC

A

professional activity or other business LLC can be formed
at least 1 member is to be authorized by law to render that service in NY
multiple professional services

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8
Q

formation of PROFESSIONAL service LLC

A

file articles of organization w NY dept of state, professions, name, address, of all members and managers, cert issued by NYS or another state, certifying they’re all authorized by law to practice
publication and file within 120 days with dept of state

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9
Q

liability of PROFESSIONAL service LLC

A

members and managers NOT personally liable for debts / obligations nor responsible for others

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10
Q

negligent or wrongful act of member or manager in PROFESSIONAL service LLC

A

he/she is liable and also for anyone under their direct control

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11
Q

professional service CORP

A

same professional service

within NY

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12
Q

professional service CORP formation

A

cert of incorporation w NY dept of state
profession
name
address of all shareholders, directors, officers, licensed in profession
NO publication

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13
Q

certificate for professional service CORP

A

each is licensed by law to practice the profession

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14
Q

professional service CORP - services

A

has to be licensed to provide service in NY

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15
Q

all professional docs in professional service CORP

A

must be signed by the licensed person

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16
Q

professional service CORP liability

A

limited
shareholder
director
officer
NOT personally liable for torts others commit
ARE liable for negligent or wrongful conduct committed individually or person under direct supervision or control while providing service
NOT liable personally for corporate indebtedness

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17
Q

professional service CORP management

A

board of directors- elected by shareholders

18
Q

shareholders power

A

limited

elect directors

19
Q

board of directors

A

elect officers to manage business day to day

20
Q

professional service CORP formation

A

file cert of incorporation w NY dept of state
name
county
purpose / any lawful purpose / catchall provision to NOT limit what can do- to engage in any lawful act/activity for which organized
except state statute - railroad or bank

21
Q

cert of incorporation - professional service CORP

A 
number of shares
authorized to issue
par value
or no par value
1 class or more than 1 class of common stock
preferred share authorize
duration / perpetual
ny sec of state agent for service of process
22
Q

bylaws / professional service CORP

A

rules re regulation/mgt of corp.
procedure for corp decisions, right and powers, conduct of business
shareholder meeting, annual meeting
director appointment
MUST be consistent w law
adopted by incorporator, then shareholders adopt /amend/repeal

23
Q

any board adopted bylaw

A

can be amended/repealed by shareholders

24
Q

shareholder voting

A

unless cert/bylaws state differently, plurality of votes cast

25
Q

directors may be removed

A

FOR CAUSE by vote of shareholders

26
Q

shareholder may remove director WITHOUT CAUSE IF?

A

provided for in cert of incorporation / bylaws

27
Q

other shareholder action requires

A

majority of votes cast

abstaining from voting DOESNT count toward the votes cast

28
Q

voting to amend cert of incorporation

A

majority of total shares entitled to vote

29
Q

voting for merger requires

A

a. two thirds vote
2.22.1998 (NY amended bus corp law)
b. majority of votes
after 2.22.1998

30
Q

officer types

A 
president
vp
sec
treasurer
elected by board
31
Q

officers may hold how many offices?

A

more than 1

32
Q

removing officers

A

board is authorized WITH OR WITHOUT cause

33
Q

election of officers

A

can be by shareholders, instead of by the board

34
Q

officer elected by shareholders may NOT removed by whom?

A

the board

35
Q

officer elected by shareholders may be removed by whom?

A

with/without cause by the shareholders .

authority to act may be suspend by board, FOR CAUSE.

36
Q

director / officer STANDARD OF CARE

A

perform duties in good faith
with degree of care that ordinarily prudent person in like / similar circumstances
depends on issue at hand, circumstances of the case, nature of corporation’s business

37
Q

business judgment viewed by courts

A

courts WONT second guess it , if exercised in good faith based on available info after reasonable investigation
in good faith in corp interest
BUSINESS JUDGMENT RULE
even someone else may have reached a different decision

38
Q

didnt breach fiduciary duty

A

not liable

39
Q

breaching fiduciary duty

A

bad faith
self dealing
conflict of interest

40
Q

director/officer liability

A

no personal liability as long as performed duties

even if chose to breach a contract, liability is the corporation’s

41
Q

director / officer when making business decision may rely on

A

information, opinions, reports, statements, data, for director - presented by committe of board, on which director does NOT serve, if director believe the committee merits confidence, so long as director-
acted in good faith
proper degree of care
for directors and officers, can rely on officer/ employees of corp., or 50% direct or indirect subsidiary, whom believes to be reliable and comptent on matter presented.
can rely on counsel and public accountants

42
Q

director/officer NOT acting in good faith

A

if has knowledge that would cause the reliance on the information/statements to be unwarranted

NY BAR REVIEW (123 decks)

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