REG - M6 - Business Law Part 2

Question 1

6 Types of Bankruptcy

Answer 1

Chapter 7 - Liquidation
Chapter 9 - Municipal Debt Adjustment
Chapter 11 - Reorganization
Chapter 12 - Family Farmers with Regular Income
Chapter 13 - Debt Adjustment with Trustee
Chapter 15 - Cross Border Case

Question 2

Which Types require a Trustee?

Answer 2

YES TRUSTEE - Chapter 7 and Chapter 13
NO TRUSTEE - Chapter 11

Question 3

What is an Automatic Stay?

Answer 3

Once bankruptcy proceedings start
Creditor cannot pursue remedies against debtor or their assets
goes into effect the moment bankruptcy petition is filed

Question 4

Administration Expenses

Answer 4

Provision for Admin expenses to be paid in FULL OR
Chapter 11 reorganization will not be approved by court
also must have plan for other full payment to other creditors

Question 5

Registered Agent

Answer 5

Can have legal documents served on them on behalf of the corporation if it is sued
but are NOT liable for pre-incorporation contracts (PROMOTER is)

Question 6

Partner’s Interest definition

Answer 6

Partner’s right to receive profits and surplus
It can be assignable without the approval of other partners
BUT it does not transfer management rights or cause dissolution

Question 7

Partnership votes REQUIRED for Extraordinary Transaction

Answer 7

Unanimous vote required by all partners
RUPA - Revised Uniform Partnership Act
requires matters not in ordinary course of business
MUST be approved by all partners

Question 8

FUTA taxes

Answer 8

Federal Unemployment Tax Act
expenses are deductible for all employees
NOT calculated as a fixed % of all comp paid to an employee
NOT withheld from wages of covered employees
NOT payable by employers for ALL employees

Question 9

Short Form Merger Decision to Merge 90% owned Sub needs what to happen?

Answer 9

Sub’s shareholders have right to dissent and take advantage of appraisal remedy

Question 10

Basic provision of Workers Comp systems

Answer 10

Injured employee is allowed to recover on strict liability theory
DOES NOT need to prove employer negligence
DOES NOT allow employer to invoke defense of contributory negligence
DOES NOT allow employer relief by any employee negligence

Question 11

Partnership allocation under RUPA

Answer 11

unless agreed otherwise
Partners share in losses in the same manner they share in profits