Unit 4 Flashcards
What are the characteristics to a Sole Proprietorship?
Single (sole) owner, but unlimited employees. No separate legal entity, unlimited personal liability (including debts of sole proprietorship) Files business taxes on personal taxes
What are the characteristics of a General Partnership?
Two or more owners who agree to carry a business for profit. Unlimited personal liability IF they cannot pay their debt. Considered a separate legal entity, each person reports business income on the owner’s personal tax forms, but does not pay income tax.
What are the obligations of Partners?
Duty of Care - act in good faith, and refrain from negligent misconduct and violations of law. Duty of Loyalty - Act in the partnership’s best interest, refrain from competing against each other.
What are the roles of Shareholders?
To Elect Directors and Amend the Articles of Incorporation
What are the roles of Directors?
To declare dividends, hire officers, approve budgets/strategy, and audit committee
What are the roles/responsibilities of Officers?
To run day to day operations
What are the characteristics of a C Corporation?
Must file an article of incorporation with the Secretary of State to start, owners are called shareholders, separate legal entity, double taxation, limited liability and
Double Tax on a Corporation
Pays tax on profits, declares dividend and makes dividend payment to shareholders
Double Tax on Shareholders
Pay income tax on dividend
What is a Derivative Action Lawsuit?
If the Director and Officer harms the corporation, then the shareholders may file a lawsuit against the Corporation against the Director and Officer
Business Judgement Rule
In a derivative action lawsuit, a director or officer may assert the business judgment rule defense. They are not liable if they exercised a reasonable judgement
Loss of Limited Liability - Corporate Veil
Exposes shareholders to personal liability for Corporation debts when there is inadequate capitalization or co-mingling of funds
What are the different types of Corporations?
Domestic, Foreign, Public, Publicly Held, Closed, C Corp, S Corp, Benefit Corp
Publicly Held (Traded) Corporations
Traded on a stock exchange
Close Corporations
Held by private owners
Benefit Corporations
Committed to making a profit and creating public benefit
What are the characteristics of an LLC?
The file under the Articles of ORGANIZATION with the Secretary of State. Owners are called members. Separate Legal Entity, and passes through a member’s personal tax filings. Limited Liability. `
What is Sarbanes Oxley?
It requires the senior officers actively monitor internal accounting controls. CEO and CFO must certify the accuracy of corporate financial statements. The Board of Directors have to have an audit committee made up of outside directors.
What are the 5 protected clauses by the 1964 Civil Rights Act?
Race, Color, Religion, Gender and National Origin.
What is a Franchise?
The owner of intellectual property licenses others to use it in the selling of goods or services
What is an Agency?
The two parties (the principal and agent) have agreed the agent will act on behalf of (or instead of) the principal to negotiate and transact business with other parties
What is a “fiduciary” relationship?
The relationship involves trust and confidence
What is an Agent?
Someone who represents the Principal and does business on their behalf.
What is a Power of Attorney?
A written document that authorizes another person (the agent) to act on a person’s (the principal’s) behalf
What is Respondent Superior?
The employer (principal) is liable for any harm caused to a third party by the employee (agent) when it occurs in the course and scope of employment
What is Express Authority?
Verbally or Knowingly giving the right to do something
What is Implied Authority?
The authority is to do what is reasonably necessary to carry out express authority. Can be inferred from what position the agent occupies, and is based on custom or past performance.
What is Apparent Authority?
The Agent’s conduct leads third parties to believe the Agent has authority on behalf of the Principal.
What is Ratification?
When the Agent does not have authority but Principal approves the action after the fact. (Don’t ask permission, just forgiveness.)
What is a disclosed Principal?
The principal’s identity is known at the time the Agent contracts with the third party. (power of attorney is always disclosed)
What is an Undisclosed Principal?
The 3rd party doesn’t know that the Agent is an Agent working for a Principal and thinks they are contracting directly with the Agent.
What is a Partially Disclosed Agent?
The 3rd party knows the Agent is working on behalf of a Principal but doesn’t know their identity.
Is the Principal liable for any harm an agent causes to a 3rd party in the course and scope of employment?
Yes, and the Agent is also Liable. This is due to a “Master-Servant” relationship and the fact that it’s during the course and scope of employment.
Is the Principal liable for any harm an agent causes to a 3rd party in the course and scope of employment?
Yes, and the Agent is also Liable. This is due to a “Master-Servant” relationship and the fact that it’s during the course and scope of employment.
Is the Principal liable if they hire an independent contractor?
No. Since they don’t have specific instructions like a typical Agent would the Contractor is liable. (Ex. Uber, Lyft, etc.)
When can’t an employer terminate employment?
Public Policy (Jury Duty), Contract, Quasi Contract (employee handbook), Statutory Violations
What does the Sarbanes Oxley Act of 2002 do?
Protects “whistleblowers” of private companies whose shares are publicly traded
The State of Missouri’s minimum wage is $13. But the federal minimum wage is $7.25. If Max is hired by Home Depot, which wage is he entitled to?
The $13. Because State Law overpowers federal law in this case
What is Overtime?
“Covered workers” recieve 1.5x pay rate for each hour over 40 they work in a week.
What does OSHA mainly do?
Makes Employers: Post safety notices, keep work injury and illness records on each employee, make records available for inspection when requested by an OSHA officer, and Notify OSHA within 8 hours if an employee dies or more than 3 employees are hospitalized because of a work related incident
Who can receive Worker’s Comp?
An Employee who is accidentally injured on the job regardless of fault, during the course and scope of employment.
Who can receive Worker’s Comp?
An Employee who is accidentally injured on the job regardless of fault, during the course and scope of employment.
Who is taxed with Social Security and Medicare?
Both the employer and employee. The Employer matches what the employee pays.
Who can receive FMLA?
Employees who have worked for a company for over a year
What are the characteristics of FMLA?
Allows employees to take off from work for up to 12 weeks/year, is unpaid, for family or medical reasons or in certain situations that arise from military service.
What are some events covered by FMLA?
To care for a newborn, to care for a newly adopted/fostered child, to care for a spouse, child, or parent with a serious health condition, an employee suffering from a serious health condition and cannot work, and matter related to a family member serving in the military.
What is the Electronic Communications Privacy Act?
It prohibits employers from intercepting an employee’s personal communications UNLESS communications are made on an employer’s device or system.
Can an Employer drug test you?
A private business can, but a governmental position cannot due to the 4th amendment.
Can an Employer require employees to listen to an anti-union speech during work hours? Is this a fair or unfair Union Labor Practice?
It’s fair since it’s under the 1st amendment
Can an Employer ask employees if they will vote for the union prior to a union vote? Is this a fair or unfair Union Labor Practice?
Unfair
Can an employer hire replacement workers for striking employees and refuses to hire back the employees when the strike ends? Is this Fair or unfair?
Fair, just because you’re mad doesn’t guarantee you a job.
What is the Immigration Reform and Control Act?
Requires employers to have (immigrant) employees fill out an INS form I-9 “Employment Eligibility Verification.” and Provides documentation verifying the employee’s identity (ex. green cards, driver’s license, birth certificate, etc.)
What’s a H1-B Visa?
Allows companies to sponsor employees from a foreign country who have a specialty occupation. (Ex. IT, doctor, teacher, etc)
What is the Disparate Impact Theory?
Barriers to employment that exclude a protected class and are unrelated to job performance violate Title VII (regardless of intent)
What is the process to file a Claim?
Before filing you must file a complaint within 180 days, then they will facilitate the settlement or issue a “right to sue” letter
What is the process to file a Claim?
Before filing you must file a complaint within 180 days, then they will facilitate the settlement or issue a “right to sue” letter
What are some defenses to an EEOC claim?
Failure to prove prima facie case, or if discrimination is proven use: business necessity, bona fide occupational qualification, seniority system, and effective antiharassment policy & prompt remedial action
What type of harassment is sexual harassment?
Either Quid Pro Quo or Hostile Work Environment
What are the ADA requirements?
Someone must have a disability, be able to perform the “essential functions” of the job, and requires the employer to provide “reasonable accommodations” and no “undue hardship”
What is Affirmative Action?
Recruiting and advancing qualified minorities. This can include training programs, recruitment efforts, etc.
What makes the Government have Affirmative action?
Executive order 11246
What can make a private company have affirmative action?
Some companies voluntarily have it
