R8 Flashcards
Does the principal debtor owes his surety a duty to perform?
Yes. hence surety can sue principal for exoneration/subrogation/reimbursment (indemnification).
are agents liable to 3rd party to perform contract?
If principal disclosed- no.
If identity not disclosed(partially)- yes
is principal liable for agent’s tort?
normally no. unless it’s en employee’s negligence within the scope of employment. or if principal autherized
Is a written agreement needed to form a partnership to own land?
NO. Only when the partners want to enforce an agreement to remain partners for longer than one year.
Can a general partnership partner assign his partner status to others at anytime?
NO. only his interest (profits and surplus) is assignable. Partner rights/ status need unanimus approval. Same with heirs and creditors.
In general partnership, when a partner dissociates, does it cause the partnership dissolution?
NO, not unless all partners agree to dissolution, and then the partnership continue to exist until all business is wound up.
In a limited partnership, can a general partner also be a limited partner?
Yes, still has unlimited liability but can have limited partner’s interest.
Is a limited partner an agent of the partnership?
NO. passive, no right in management, may vote on extraordinary matters, just like stockholder of a corporation
Do members of an LLC participate in management?
Yes, can hire managers to do it though, if so then members are not agents, managers are.
When will the corporate veil be pierced?
commingle personal funds; inadequately capitalized when formed; Fraud on existing creditors.
How does dividend affect shareholder’s equity?
Cash dividend- decrease equity.
Stock dividend- decrease retained earnings, increase paid in capital, total equity unchanged
What’s preemptive right?
The common law grants shareholder’s right to purchace shares upon issuing new shares, to maintain voting strength
