REG 5 Flashcards
Order of distribution on dissolution of a general partnership
General Partner Loans
PArtners’ Capital accounts
General partners’ profits
Agent Duties to the Principal
Duty of loyalty
Duty of obedience
Duty of reasonable care
Duty of account
Principals responsibilities to the agent
Duty of Compensation/Reimbursement
Duty to indemnify the agent - For harm or loss
Duty to deal fairly and in good faith with the agent
Duty to act in accordance with the express and implied terms of a contract
Methods of authority:
Ratification
When Agent goes into an agreement with no actual authority and principal in unaware
Principal approves the work that is done, don’t have to contact third party
Reasons for automatic termination of agency relationship
Death (of eitheir principal or agent)
Incapacity (principal only)
Bankruptcy (Principal only)
Licensing (Agent only)
Destruction of Subject Matter
Illegality
Requirements to form an agency contract
Only Principals Competence, agents compentency does not matter
only written agreement needed when land is sold
Specific Performance
An order by a court to complete a previously established transaction in a contract
Statute of Frauds - Contracts that require writing
Contracts involving the sale of land
Contracts that cannot be performed within one year
Surety Agreements
Marriage contracts
Contracts involving the sale of goods over $500
Executor Contracts
Contracts the would be VOID - Assume everything else is voidable
Fraud in the execution
Physical Duress
Illegality
Adjudicated incompetency
Mutual Mistake
Negligence
Failure to perform practice in a way that a reasonable or prudent CPA would.
3 categories of excuse for Excusing performance of a contract
Impossibility
Impracticability
Frustration of purpose
Anticipatory repudation
breach of contract
Breeching party has not breached contract but Anticipate that they will
LLC Operating agreement - Designed to resolve issues
When to make distributions
Voting Rights
Rights of refusal ect
Accord and satisfaction
agreement btw two contracting parties in which the performance will replace an original performance agreed upon.
UCC Sales Article
Sale of goods - All Tangible Personal Property
(Boats, cars ect)
Common Laws Contracts
Contracts for real property land)
Contracts for intangible property (Stock)
Contracts for fixtures (buildings attached to land)
DO you use FMV or Adjusted basis for liquidating distributions out of a corp?
FMV - which is always a taxable event
Do S-Corps recognize a loss on distributions for a nonliquidating operating distribution?
No
How do S-Corps recognize gain on appreciated property when distributed?
Recognize Gain on Appreciated Property as though property was sold just prior to distribution
How are net section 1231 losses deducted?
Allowed to be deducted as as an ordinary loss
C-Corp Formation:
Section 351
Shareholders must have 80% or more ownership not including services rendered by individual
Does not have to recognize gain
