2nd QUARTER- BUSINESS LAW Exam 4 Flashcards Preview

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Flashcards in 2nd QUARTER- BUSINESS LAW Exam 4 Deck (54):
1

specialized business relationship between one party known as the “principal” and another known as the “agent.”

agency

2

Party who appoints a second party to serve as an agent

principal

3

Party appointed by a principal to enter into a contract with a third party on the principal’s behalf.

agent

4

From principal to agent. Act in good faith on behalf of principal’s interest. Enter into contracts on principal’s behalf

delegation of powers

5

authorized to carry out particular kind of business or all business at a location.
Example: FDIC funeral Director in charge. Responsible for the funeral home

general agent

6

authorized to transact specific act or act(s).

special agent

7

three types of agent's authority

Express authority
Implied authority
Apparent authority

8

Stated in agreement creating agency. Authority by appointment. Example: Written power of attorney

express authority

9

Authority to do things in order to carry out expressed authority.
How to remember: You hire commercial embalmer, they believe they have authority to determine injection site, chemicals, etc.

implied authority

10

Authority agent believed to have because of principal’s behavior

apparent authority

11

Person who undertakes to perform a specified task according to the terms of a contract. Other contracting party has no control except as stated in the contract.

Think of trade embalmer

independent contractor

12

Party who hires employees to do certain work

employer

13

Person hired to perform work

employee

14

Need to know information for employer and employee relationships

 Employee performs work for employer.
 Employee under control of employer for work and manner of completion.
 Employer liable for injuries to third party caused by negligence of employee.
 Employer liable for torts committed by employee acting within scope of employment.
 Employer must comply with laws relating to employees.
 Social Security deductions (FICA).
 Worker’s compensation (FUTA & SUTA).
 Federal and state income tax withholdings.

15

agent's duty to principal

Loyalty and good faith
Obedience
Reasonable skill and diligence
Accounting
Information

16

principal's duty to agent

Compensation
Wages
Reimbursement of expenses incurred during course of employment.

17

compensation for sustained losses. Adherence to terms of employment contract.

indemnification

18

Termination of agency by act of the parties

Original agreement
Subsequent agreement
Revocation
Renunciation by agent

19

Termination of agency by operation of law

Subsequent illegality of subject matter
Death or incapacity of either party
Destruction of subject matter
Bankruptcy of principal
Dissolution of the corporation

20

Types of business organization

1. Proprietorship (sole proprietorship)
2. Partnership
3. Corporation

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Business owned by one person who is subject to claims of creditors. No separation of personal and business assets

Proprietorship

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 Simplest form of business organization.
 receives all profits and assumes all losses.
 bears all risks and has personal liability for all debts.
 Death terminates the business.

Proprietorship

23

Voluntary association of two or more people who have combined their resources to carry on as co-owners of a lawful enterprise for their joint profit

partnership

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Kinds of partners

general, silent, and limited

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individual actively and openly engaged in the business and held out to everyone as a partner

general partner

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- individual who takes no active part in management of a business, but has capital invested in the business

silent partner

27

partner who has his/her liability for the firm’s debts limited to the amount of their investment

limited partner

28

Duties of a partner

 Exercise loyalty and good faith
 Use reasonable care and skill
 Conform to contract of partnership
 Maintain records
 Inform one another

29

Rights of a partner

 Participate in management
 Inspect financial data
 Contribution- input as to how business is managed
 Withdraw advances (business money for personal use)
 Withdraw(share) profits

30

Liabilities of a partner

 For contracts of the partnership
 For torts

31

three types of dissolutions of a partnership

By acts of the parties
By court decree
By operation of law

32

Dissolution of a partnership by acts of the parties

 By agreement
 By withdrawal or alienation
 By expulsion (one may kick or buy the other out)

33

Dissolution of a partnership by court decree

 Insanity
 Incapacity
 Misconduct
 Futility - not making money
 Bankruptcy

34

Dissolution of a partnership by operation of law -

 Illegality / Death

35

an artificial being, invisible, intangible, and existing only in contemplation of law. An entity that is something that has a distinct existence separated and apart from the existence of its individual members.

corporation

36

Formed to carry out government functions

public corporation

37

Formed by individual to perform some non-governmental function for profit.

private corporation

38

types of public corporations

 State university
 Public hospitals
 Public utilities

39

types of private corporations

 For profit or
 Non-profit (not-for-profit)

40

written document setting forth facts about a corporation prescribed by law for issuance of a charter and asserting the corporation has complied with legal requirements.

articles of incorporation

41

grant of authority from a government to exist as a corporation

charter

42

corporate structure

Stock holders / Board of Directors / Officers

43

 Those having title to one or more shares of stock in a corporation.
 Represent combined ownership of the corporation.
 Shareholders
 Conduct meetings at least once a year.

stockholders

44

rights of the stockholders

 Receive properly executed stock certificates as evidence of ownership
 Attend corporate meetings and vote (unless denied by express agreement).
 Receive proportionate shares of profits when distributed as in dividends.

45

Person authorized to vote for another, written authorization to vote for another.

proxy

46

 Body elected by stockholders to act on behalf of the corporation and carry out the board’s policies.

board of directors

47

 Authorized by Board of Directors to carry out board policies.
(President / Vice-President / Secretary / Treasurer)

officers

48

types of dissolution of corporations

voluntary
involuntary

49

voluntary dissolution of corporation

By vote of the stockholders
 Corporation pays debts,
 Distributes remaining assets to stockholders as to number of stocks owned, and
 Surrenders articles of incorporation.

50

involuntary dissolution of corporation

Action of the court or state
 Due to forfeiture or abuse of corporate charter,
 Violation of state or federal law,
 Fraud in obtaining the charter, or
 Failure to pay specified taxes.

51

manner of dissolution of a corporation

 Existence terminated except to complete its business.
 Cannot sue, own property, or form contracts.
 Except to convert assets to cash.

52

What are some examples of how funeral homes enter into agency agreements?

answering service, embalming agency, livery company

53

What is unique about independent contractors?

They have more freedom
for example Trade embalmer sets schedule, has own keys; you have less control over them

54

Are county hospitals usually corporated or incorporated?

incorporated