Business Organizations Flashcards
(52 cards)
1
Q
Preamble
A
Corporations, TX has adopted the TBOC and it governs.
2
Q
How to form a Professional Association
A
- filling a CoF
- w/ TX SoS
- in accordance w/ TBOC
- can be formed by individuals, licenses as doctors, medicine, osteopathy, podiatry, dentistry, optometry, therapeutic, chiropractic, medicine, mental health professionals, and lawyers
3
Q
How can C Convert to Another Biz Type
A
- board action
2. 2/3 SH approval
4
Q
Fundamental Corporate Change Req
A
- majority of board
2. 2/3 of shares entitled to vote
5
Q
What Governs Professional Cs
A
Title 7 of the Business Organization Organization Code (BOC)
6
Q
How can the Article of the C be Changed
A
- board action
2. 2/3 approval
7
Q
When Dissenting Shareholder has Right of Appraisal
A
- fundamental C change
- merger
- sale of shares in exchange
- transfer of substantially all assets
8
Q
What is Duty of Care for a Director
A
- good faith
- exercise ordinary care/prudence
- prudent person similar circs
9
Q
What is SH’s Right to Inspect the Books
A
- own stock for min of 6 months or own 5% stock
- make written demand
- state proper purpose
10
Q
How SH’s take a Valid C Act
A
- unanimous written consent or
- majority vote at meeting
- special meeting
11
Q
Req for SH to Bring Derivative Suit
A
- owned stock when claim arose
- written demand when claim arose
- wait 90 days
12
Q
How Director can Benefit from Interested Transaction
A
- full disclosure to board
- approval
- at meeting
- or majority of disinterested D’s and SH’s
- must let board reject first
13
Q
Reqs for Director’s Meeting
A
- proper notice
- quorum
- majority of Ds approve
14
Q
Biz Judgment Rule
A
- good faith
- informed
- rational basis
15
Q
Ways Corp can be Dissolved
A
- written consent of all SHs
- board action + 2/3 Sh approval
- ct ordered involuntary
16
Q
Duty of Loyalty
A
- Ds
- good faith
- reasonable belief actions are in best interest of C
17
Q
Req for Director/Officer Meetings
A
- quorum
- majority vote of those present
- if D leaves, this breaks quorum
- special meeting notice
- time & place (no purpose, no email, no proxies)
18
Q
Req for BoD
A
- at least one or more natural personas as directors
- Ds elected by SH at annual meeting
- bylaws can provide 4 classified board
- which divides B by halves or thirds
- w/ 1/2 or 1/3 elected each yr
19
Q
When do Preemptive Rights Arise
A
- only has these rights if articles include them
2. prior to 9/03 SH had the rights unless articles disclaimed them
20
Q
Req for Valid Corp Act
A
- unanimous
- written consent of Ds (no meeting)
- majority vote (with meeting) + quorum
21
Q
Formation Req of a Corp
A
- people
- paper
- act
22
Q
Info Req in the CoF
A
- Corp name
- name & addy of incorporator & initial board
- duration
- purpose
- capital stock structure
- SH rights
- statement that C will not commence prior to receipt of min of $1K
- if Close Corp, provision
- name & addy of corp agent & incorporates
23
Q
Req for Corp Formation
A
- certificate of information
2. filed w/ the TX SoS
24
Q
When Veil of Corp can be Pierced
A
- alter ego theory
- undercapitalization
- avoid existing obligations/fraud
25
What are Preemptive Right
1. rights of current SH to maintain their proportionate stake in the C
2. by allowing them preemptive rights to buy stock to maintain their share
3. any time issuance of stock by the C for $
26
Req for Limited Liability (LLC)
1. any natural person
2. file w/ SoS
3. pay fee
4. include the words "lit liab co" or "LLC"
5. includes PLLC
27
Statutory Req for Directors
1. one or more
2. elected at annual meeting
3. removed before term expires by SH
4. board of SH can fill
28
Main Characteristics of a LLC (NOT a CORP)
1. like a corp
2. managers run C unless otherwise stated in the articles of organization
3. pass through tax like P?
4. limited liability for all obligations, except own torts
5. LLC liable on own Ks and torts
29
What is General Partnership (GP)
1. biz entity where partners
2. w/ express or implied intent
3. share w/ each other profits or losses
4. of biz undertaking in which all invested
30
Biz Org Partnership Preamble
principle/agency relationships exists when principal has assented, benefited, and has control
31
What is Actual Authority
1. agent reasonably believes
| 2. principal has given A authority through the following
32
Req to Bind Principal to a K entered into by an Agent
1. actual authority or
| 2. substitute
33
What is Apparent Authority
1. principal clocked agent w/ appearance of authority
| 2. 3P reasonably relied on appearance of authority
34
Substitutes fr Actual Authority to Exist to Bind a Principal to an Agents K
1. ratification
2. adoption
3. apparent authority
35
Types of Authority
1. actual authority
2. apparent authority
3. implied authority
36
Agents Duties to Principal
1. duties under K
2. fiduciary duty of loyalty
3. obedience to reasonable directions
4. reasonable care under the circs
37
How Agency Relationship Created
1. agreement
2. of P
3. principal has capacity
38
Principal Duties to Agent
1. compensate
2. reimburse
3. indemnify
39
How to Determine Whether Tortfeasors was EE or independent Ker or
1. right to control
2. supply tools/workplace
3. long term employment
4. little skill
5. part of reg biz of ER
6. payment regularly and not interval
40
How Actual Authority Terminate
1. reasonable/specified time
2. change of circs
3. agent acquired adverse interest
4. Agent says so
5. P says so
6. death
7. incapacity
8. bankruptcy
41
What is Actual Express Authority
principal used words to express authority to agent
42
When does a Partnership Exists
1. association of 2 or more ppl
2. to carry on business
3. for profit
4. as owners
43
How an Limited Liability Part (LLP) is Formed
1. file certified formation w/ SoS
2. pay fee
3. written LP agreement
4. name has "LP" or "Ltd" in it
44
Order of Distribution of Partnership Assets Upon Winding Up
1. creditors
| 2. partners for capital account
45
When Principal is Liable for Independent Contractor's Torts
1. inherently dangerous activity
2. non-delegable duty
3. principal negligence in hiring
46
Duties a Partner Owes to Partnership
1. strict fiduciary duties
2. duty of care
3. duty of loyalty
4. duty to exercise good faith
5. duty to render full informal about partner upon reasonable request
47
Main Characteristics of Limited Partnership (LP)
1. one or more GPs
2. one or more LPs
3. GP like normal P
4. LP limited to capital contribution, unless LP takes pat in control
48
Factors TBOC List to Determine whether a Partnership Exists b/w Parties
1. receipt of right to receive profits
2. intent to be partners
3. participation or rights to participate in control of B
4. sharing or agreeing to share losses
5. contributing $ or other property to B
49
How LLP is Formed
1. register annually w/ SoS
2. pay $200 partner fee
3. include "registered limited liability partnership" or "LLP"
4. carry min $100K liability insurance or segregate
50
Main Characteristics of LLP
1. its like a GP
| 2. but not vicariously liable
51
Reqs of Limited Partnership (LP)
1. file a certificate of LP
2. at least 1 GP
3. at least 1 LP
52
Events Req to Wind Up Partnership
1. illegal
2. judicial decree
3. sale of substantially all assets
4. end of definite term
5. unanimous consent
6. partnership at will, agreement by majority in interest
