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ACC 241 > ACC 241 Test 3 > Flashcards

ACC 241 Test 3 Flashcards

1
Q

Duties of an Agent

A

Performance
Notification
Accounting

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2
Q

Duties of a Principal

A

Compensation
Reimbursement/Indemnification
Cooperation

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3
Q

When does termination of an agency happen?

A

Act of Parties
Operation of Law
Impossibility

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4
Q

What operation of law terminates an agency?

A

Death of principal/agent
Insanity of principal/agent
Bankruptcy
War between principle/agent’s countries

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5
Q

What impossibility terminates an agency?

A

destruction of subject matter
loss of a required qualification
change in law

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6
Q

What types of notice need to be given after terminating an agent?

A

Direct – to all ppl who death directly with agent

Constructive – any third party who knows the agency but did not work with agent

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7
Q

What breaches agent’s duty of loyalty

A 
Self Dealing
Usurping an opportunity
Competing with principal
Misuse of confidential info
Dual agency
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8
Q

When is principal liable for agents torts

A

Agent is negligent in scope of employment in detour (not frolic)
Agent misrepresentation w/ in scop eof employment
Not in coming/going

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9
Q

When are principals liable for independent contractors and torts?

A

Dangerous activities and Negligent Selection

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10
Q

Tests for inside/outside scope of employment

A

Motivation – action of employees in who’s interest?

Work Related – on the clock or at work?

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11
Q

Effect of principal disclosed

A

3rd party knows your an agent and who you represent

Principle breeches only principal liable

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12
Q

Effect of partially disclosed

A

3rd party knows your agent, not who you represent

Breech leads to suing of either agent or principal

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13
Q

Effect of undisclosed

A

3rd party doesn’t know your an agent

Can sue either/or

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14
Q

Sole prop

Creation
Liability
Taxation

A

Creation – don’t do anything
Liability – unlimited personal
Taxation – as individual

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15
Q

3 Factors Determining General Partnership

A

1) Sharing Profits
2) Sharing Losses
3) Jointly managing

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16
Q

What papers are involved in GPs fomration

A

Articles of partnership

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17
Q

How do you add new partners in a partnership

A

consent of all other parners

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18
Q

What are the rights of partners in a partnership (5)

A 
management
profits
compensation/reimbursement
return of loans and capital (in wind up)
information
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19
Q

What are the duties of partners in a partnership (4)

A

loyalty
care (reasonable)
inform
obedience

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20
Q

Different liabilities (contract vs tort)

A

Contract – Joint

Tort – Join and Several

21
Q

What happens upon dissolution of a general partnership

A

creditors paid first
return cap. contributions
pay of money left over

22
Q

What papers are involved in LP formation?

A

certificate of limited partnership

23
Q

What is the difference betwen an LLLP and an LP?

A

In LLLP….

Both GP and LP all have limited liabilities
only in some states
Some investors might want a company that is “all in”

24
Q

What papers are used for LLC?

A

Articles of Organization

25
Q

What is an operating agreement?

A

In an LLC – not required but important – internal

26
Q

Types of management in an LLC?

A

member-managed

manager-managed

27
Q

Can an LLC be elected to be taxed as individuals?

A

Yes

28
Q

What is a certificate of interest

A

evidence of ownership (like a stock certificate)

29
Q

What is an LLP? Why?

A

For professionals only

no personal liability for malpractice of others; only personally liable for your own

30
Q

Differentiation between Corporations (Foreign, Alien, Domestic)

A

Foreign – different state
Alien – different country
Domestic – in state incorporated

31
Q

Formation of a corporation?

A 
Pick State
Pick name
Draft & File articles of incorporation
Wait for state to send corporate charter
First meeting (elect board of directors and write bilaws)
32
Q

Why is S Corp beneficial?

A

Avoid double taxation

33
Q

Requirements for forming an S corp?

A

Domestic corporation (in U.S.)
< 100 employees
only one class of stock
employees are citizens or residents of U.S.

34
Q

Ways a corporation can dissolve?

A

Voluntary (resolution of board and stock holders)
Administrative (secretary of state)
Judicially (Attorney general)

35
Q

What does stock represent

A

% control
% earnings entitled to of dividend
% net assets (only on dissolution)

36
Q

What are the roles of shareholders

A 
Invest
Aprrove major corporate structure changes
articles of incorporation
Elect/Releasing board
Merging
Selling Major Assets
37
Q

What is a derivative lawsuit?

A

Shareholders sue on behalf of corporation

38
Q

What are the requirments for Derivative lawsuits? (3)

A

shareholder @ time of injury
Fiarly and adequately represents interests of corp
written demand on corporation

39
Q

Liability of Shareholders

A

Limited liability – Only affected if court pierces the corporate veil

40
Q

When can court pierce the corporate veil

A

comingling of assets

undercapitalization

41
Q

Directors

Compensation
Election, Removal
Responsabilities

A

Compensation – Usually
Election/Removal – By Shareholders
Responabilities – Major policy decisions

42
Q

To whold a board meeting how many board members need to be present?

A

Quorum of board (Majority to conduct)

43
Q

How many board members need to vote for a policy to be passed?

A

Majority of the Quorum

44
Q

Who are officers hired by?

A

The board

45
Q

Duty of Obedience of Directors and Officers?

A

???

46
Q

Duty of Care for Directors and Officers?

A

???

47
Q

Business Judgment Rule?

A

Protects officers/diretors from bad decision as long as not a breech of duty of care

48
Q

Ways to Breech Duty of Loyalty of Directors and Officers?

A

Self Dealing
Usurping
Competing with
Secret Profits

ACC 241 (4 decks)

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