Ways involuntary partnerships can be formed by implication
Sharing profits
Constitutes prima facie evidence that a partnership exists
Partnerships governed by
Uniform partnership act
Involuntary formation by estoppel
Results when someone allows the inference to be made that he/she is a partner
Allowing name to be used to get a loan
Tax consequences in partnerships
Don’t pay taxes
File informational tax return
Unanimous constant required in a partnership when
Confession of a judgment
Transfer of all partnerships assets
Selling goodwill
Admission of another partner
Limited partnerships governed by
Ulpa
Limited partners taxes
Flow through
Tax benefits
IRS scrutinizes to be certain it’s a partnership and not a corporation based on
The transferability of assets
The assets of the general partners
Net worth of general partnerships
Consent of limited partners required for
Admitting a new general partner
Admitting a new limited partner
Extraordinary transactions
Limited liability for physicians dentists and lawyers
Professional corporations
Requirements for a corporation
- Domestic corporation
- No more then 100 shareholders
- Limited type of shareholders
- No non alien residents as shareholiders
- One class of stock
Considerations for where to incorporate
Status of states corporation laws
State tax laws
Ability to attract employees
Incentives state offers
Watered shares
Shares for which par value was not paid
Ways corporate veil is pierced
- Inadequate capitalization
- Alter ego theory
- Ignoring corporate formalities
- Forming to perpetrate a fraud on creditors
Corporate governing law
Mbca
Independent members
Not been an officer, employee, or manager of the company in past three years
Not related to anyone who works for the company
Not under any type of consulting or remuneration agreement with the corporation
Not a principal or owner of a company that does business with the board
Board resolution for
Merger
Consolidation
Asset sale
Short term merger
Merger between subsidiary and parent that owns 90% of company
Freeze outs
Mergers undertaken to get rid of minority shareholders
Transfer restrictions are valid if
Necessary
Disclosed
Reasonable
Business judgement rule
Duty of care imposed upon members of corporate boards that require adequate review of issues and info, reasonable care in making judgement
Formation of llc
Article of organization
Management of llc
All owners can participate or is delegated to one member
Contract governing the rights and relations of limited partners
Articles of limited partnership
Federal law that increases and modifies the regulation of financial markets, investment firms, securities analysts, rating agencies, corporate boards, and consumer credit
Dodd- frank Wall Street reform
& consumer financial protection act
Security
Investment in a common enterprise with profits to come from the efforts of another
Who do you register securities with
SEC
Interstate offering exemption
Issuer must be domestic business in state where offering
Offerees must all be residents of that state
Triple 80 requirement
Transfer restrictions apply
What law is accredited investors determined by
Dodd-frank
Accredited investors
Private business development
Directors, officers, partners of issuer
Banks
Purchaser of 150,000 or more
Natural persons with networth more then $1 million
Married persons with income of greater than or equal to 200,000 a year
How many days does sec have to reapond to security registration
20 days
How do you test if it’s a security
Howey test
Sec testing for what
Regulation full disclosure not considered about merit just making sure all the information is there
Section 11 Violations of 1933 act
Failure to make a disclosure
Registration statement carries a material misstatement or omission
Investor experimeced a loss
Board that inspect firms to determine compliance with Sarbanes-Oxley & investigate security violations
Pcaob
Section 12 violations of the the security act of 1933
Selling without registration
Selling before effective date
False information in the prospectus
Securities act of 1934
All securities traded on national exchange
All securities of firms with over 500 shareholders or $10 mil in assets
Takeovers governed by
Williams act
Section 10 b & rule 10b-2
Anti fraud provision
Section 16 ( short swing purchases) applies to
Officers, directors, and 10% shareholders
Liable to company for sales and purchases or purchases and sales during any 6 month period
When most shareholders report proxy a
to the sec at least 10 days before they are sent
Tender offer
Public advertisement offer by company to buy stocks at usually higher price then normal
Williams act
Applies to any offer to buy more then 5% of another securities
How many days after a tender offer to shareholders have to withdraw their shares
A week but actual purchase can’t go through for 15 days
Blue sky laws
State security laws
State security laws follow
Merit system
Fair just and equitable
Patents must be
Nonobvious, new, useful
3 types of parents
Utility or function
Design
Plant
Life of a patent
14 to 20 years
How to obtain patent
Register with patent and trademark office
How to receive a copyright
Register of copyrights but copyrights are automatic but can’t sue if not registered
Life of copyright
Life of author plus 70 years or corporate is 120 years from creation or 95 from publication whichever is shorter
Who do songwriters register with to collect there royalties for them
ASCAP & BMI
Digital millennium act
Criminalizes assisting others in circumventing materials that are copyrights
Trademarks are governed by
Lanham act
Where do you register trademark
Patent and trademark office. People have 5 years to contest and if no one does it becomes a trademark
Trademark life
Indefinite
Covers blurring of trademarks
Federal trademark of dilution act of 1966
Trade dress
Colors shapes and deisgns associated with a product
Trade dress covered by the
Latham act
Cyber squatting
Registering sites and domain names that are defectively confusing
Trade secrets
Advantageous formulas, devices or completion info or anything that gives a business a competitive edge
Punishment of trade secret
Felony
Life of trade secret
Indefinite
Foreign corruption practices act applies to
Businesses with principal offices in the us
Foreign corruption practices act
Prohibits making authorizing or promising a gift to a foreign offices with the intent to corrupt for the purpose of obtaining or retaining a business
Who are foreign officials
Gov official Judicial figures UGO Polical canidates Olympic board