Low - BA

Question 1

Agency Relationship

Answer 1

person or entity that acts on behalf of another.

(1) assent/consent (2) benefit and (3) control

Question 2

Ratification

Answer 2

ratification will make principal liable for agent’s acts. Occurs when P has: (1) knowledge of all material facts or K terms and (2) manifests assent of conduct

Question 3

Vicarious Tort Liability

Answer 3

employee acts within scope of his employment in order to further goals of employer - employee may seek indemnification from employer

Question 4

Partnership v. Separate Business

Answer 4

Considerations: (1) operates under separate name (2) files of business in separate rooms (3) same office staff (4) contributed an money to other person/entity (5) share profits (6) pays rent for separate office

Question 5

Transfer of Ownership Interest in Partnership

Answer 5

Can only transfer: (1) interest in the share of profits and losses and (2) right to receive distributions
Partnership needs proper notice AND all partners must consent unless written otherwise

Question 6

Fiduciary Duties Owed by Partners

Answer 6

duty of care and loyalty
Care: breach if: (1) grossly negligent or reckless conduct (2) intentional misconduct or (3) knowing violation of law
Loyalty: (1) engage in self-dealing (2) usurp business opportunity (3) compete against partnership

Question 7

Termination of Partnership

Answer 7

Winding up of affairs needs to be completed. Partnership assets converted to cash and distributed (1) outside creditors (2) inside creditors - partners who made loans (3) partners’ capital contributions and (4) profits

Question 8

Ultra Vires Act

Answer 8

activities outside the scope of stated corporate purpose.
CL = void and unenforceable
RMBCA = valid and enforceable but D&O may be held personally liable.
Challenged: (1) SH sues Corp to enjoin UVA (2) Corp sues O/D for damages of approving UVA (3) state brings action to dissolve

Question 9

Watered Stock

Answer 9

issued at a price that is greater than its actual market value

Question 10

Dividends and Distributions of SH

Answer 10

within discretion of BoD and protected under BJR.
SH does not have the right to compel distribution UNLESS rights are granted under Articles
Court may order distribution/dividend if (1) bad faith or dishonest purpose and (2) funds were available

Question 11

SH proxy voting

Answer 11

Valid: (1) signed on appointment form or (2) electronic transmission. Must be accepted on its face.
Freely revocable even if state irrevocable UNLESS proxy coupled with interest or legal right

Question 12

BoD Meeting: Quorum

Answer 12

BoD can only act if a quorum is present. Majority of board is necessary unless in Articles but MUST have at least 1/3 of directors.
Quorum must be present at time when vote is taken

Question 13

Elections of Directors

Answer 13

SH elect directors at annual meetings. Prohibition of SH electing Directors is contrary to public policy and unenforceable

Question 14

Authority of Officers

Answer 14

Actual Authority: (1) in bylaws or (1) provided by BoD
Apparent Authority: (1) 3P reasonably believes person/entity has authority to act and (2) belief is traceable to corps manifestations
Implied Authority: necessary to perform functions. President = implied authority to bind matter in ordinary course of business

Question 15

Dissolution: Equitable Subordination & Deep Rock

Answer 15

bankruptcy = all unsecured creditors will be treated the same and collect debts equally.
Deep Rock Doctrine: claim of SH who makes loan to corp will be subordinated to claims of outside creditors if (1) corp was undercapitalized or (2) SH acted wrongfully