Module 25 Cards.txt

  1. Definition of a partnership
    - An association of two or more co-owners of a business profit
  2. Requirements of a partnership
    • - Must be co owners
    • - Must be for profit
  3. Partners might be formed orally, except when:
    - Partnership cannot perform in one year must be in writing
  4. General partnerships liability is:
    • - Unlimited for partners
    • - Jointly and severally liable for all partnership debts, obligations, and torts
  5. According to the doctrine of Respondeat Superior, if a partner commits a tort while acting on partnership business, liability is imposed on:
    - Himself, the partnerships, and fellow partners
  6. Agency in partnership?
    - Partners are agents of the partnership and of each other
  7. What must be done when a partnership is terminated?
    - Each partner must give actual notice to old customers and a published notice to new customers upon the termination of the partnership.
  8. Limited partnerships consist of:
    - At least one general partner, and other limited partners
  9. The liability of limited partners extends to:
    - No liability beyond their capital contribution
  10. If a limited partner takes an active role in management, their liability:
    - Is increased to that of a general partner due to appearance
  11. The following votes are not considered "active role in management" for limited partners:
    • - Dissolution of partnership
    • - Changes in the limited partnership
    • - Admission or removal of a general partner
    • - Amending the certificate of limited partnership
    • - Act as agent
  12. The following require unanimous consent of all partners:
    • - Admit new partners of all sorts
    • - to transfer partnership property
    • - to change partnership agreement
    • - to admit liability in a lawsuit or submit claim to arbitrator
    • - make changes in partnership business such as selling the goodwill
  13. Partnership loses, if not stated in the agreement, are divided as such:
    • - General partnership: same as the gains
    • - Limited partnerships: based on their capital contributions
  14. If a general partner makes a loan to the partnership, in the event of liquidation:
    - Outside creditors are paid first, then the partner.
  15. When dealing with partnership property, each partner:
    - is NOT a co owner of the property
  16. A sale of partnership interest does not:
    • - dissolve partnership
    • - dissolve the partner's liability to debts
  17. Three steps are required to dissolve a partnership:
    • - Dissolution (any general partner ceasing to be involved)
    • - Winding up/liquidation (settlement of partnership affairs)
    • - Termination
  18. Under the Revised Uniform Partnership Act, If a partnership is ended by withdrawal of a general partnerships, the partnership can be continued by:
    - Electing to do so within 90 days of the event by the general partners
  19. The departing of a joint venturer has what effect on the joint venture?
    - Nothing, it is not dissolved.
  20. An LLC differs from other business models in three key areas:
    • - Limited liability of their investment
    • - LLC owner may fully participate in management
    • - LLC has the same tax advantages of partnerships and S-Corps
  21. To form an LLC, it is necessary to:
    • - File articles of organization with the state
    • - Have a name that clearly indicates LLC
    • - Have an operating agreement between the members
  22. Two main methods to manage an LLC:
    • - Member managed
    • - Managed by a hired manager
  23. An LLC is dissolved by:
    - Same as partnership
  24. An LLC can be binder to contracts by:
    • - Members, if member managed
    • - Manager only, if manager managed
  25. Laws for LLCs usually follow what act?
    - Revised Uniform Limited Liability Company Act (RULLCA)
  26. When determining a partner's rights and other aspect of the partnership, refer to:
    • - Partnership agreement
    • - RUPA, for any item not mentioned
  27. An LLP differs from other partnerships because:
    • - Partners have no personal liability for the contractual obligations of the firm
    • - Also no liability for torts of the LLP, unless they committed the tort
  28. A Corporation is formed:
    - By a promoter, who is liable for pre-incorporation contracts
  29. Promoters remain liable for pre-incorporation contracts until:
    - Until there is a novation
  30. Articles of Incorporation include:
    • - Stock Provisions
    • - Amount of authorized shares
    • - Voting stock
    • - Capital structure
    • - Name of corporation
    • - Registered agent (who will answer for the corporation)
    • - Name of all incorporators
  31. To amend code Article of Incorporation:
    - A resolution has to be drawn up and approved by the majority of the stockholders
  32. Debentures are also known as
    - Unsecured bonds
  33. Watered stock is:
    - Selling par value stock at less than par in original issue
  34. Foreign corporation is a corp that is doing business:
    - In a state other than the state of incorporation
  35. Approval steps for merger or consolidation of corporations:
    • - Submit a formal plan of merger to both boards and get majority approval
    • - Submit to stockholders and obtain majority approval
    • - Submit plan to secretary of state
  36. Facts of a short form merger:
    • - Parent merges with a 90%+ owned sub
    • - only necessary approval is from BOD of parent
    • - Only stockholders of the subsidiary get appraisal rights
  37. Right of appraisal means:
    - A dissenting shareholder can be bought out of a corporation at FMV
  38. Piercing the corporate veil happens by (FUC):
    • - Fraud by the stockholder
    • - Undercapitalized at the form of formation
    • - Commingling business and personal funds
  39. Stockholders have two management rights:
    • - Elect BOD
    • - Vote on fundamental changes to the corporation
  40. Pre-emptive rights mean that a stockholder can:
    - Purchase newly issued shares in order to maintain their original % of ownership
  41. Facts about dividends:
    • - No inherent right to stockholders for dividends
    • - Directors liable for wrongfully declaring dividends
    • - Dividends become a corporate debt after declaration and public notice
    • - Cannot be revoked after declaration unless for fraud
    • - Once declared, shareholders become unsecured creditors
  42. Duties of Officers and Directors:
    • - Directors handle overall management and set policy
    • - Officers handle day to day affairs
  43. Officers and directors may make a personal profit on a deal with the corporation in two cases:
    • - They make a full disclosure and do not participate in the approval process
    • - If no voting involved, the deal must be fair and reasonable to the corporation
  44. A corporation may be voluntarily dissolved by:
    - Passage of a resolution by majority of board and stockholders
  45. A corporation may be involuntarily dissolved by:
    • - Required by state for fraud, illegality or no business activity
    • - Stockholders can request a court-ordered dissolution if the corp is deadlock and wasting all the corporate assets
  46. Majority stockholders responsibility to minority stockholders:
    - They owe a fiduciary duty to minority stockholders
  47. A professional corporation means that all of the shareholders are:
    - Members of the profession the business dabbles in
Card Set
Module 25 Cards.txt
Yaeger REG Mod 25