Med - BA Flashcards
Agent - Vicarious Liability
Independent contractor: not controlled to other’s right to control performance = less extensive control
Principal generally has right to control manner and method in which job is performed = employee
Factors: (1) degree of control (2) pay hourly or by job (3) employer furnished tools (4) job benefits of employer’s business and (5) length of working relationship
Formation of LLP
(1) approval by same vote that is necessary to amend partnership agreement (usually unanimous) AND (2) filing a statement of qualification with secretary of state
LLP remains liable for obligations before became LLP
Authority to Bind Partnership
each partner = agent and has authority to bind for purposes of the business
Express actual authority: (1) acts within ordinary course (necessary and normal for managing business) = majority approval (2) acts outside ordinary course = unanimous approval
Implied actual authority: reasonable incidental or necessary to achieve duties
Apparent authority: within ordinary course OR kind carried on by partnership UNLESS (1) partner lacked authority and (2) 3P knew or had notice that partner lacked authority
Personal Liability of LLP
RUPA: a LLP partner is not liable for partnership obligations EXCEPT (1) partners are always liable for own misconduct or sign personal guarantee (2) risk of losing any capital contributions (3) obligations occurred before LLP established
Formation of Corporation
begins at date the Articles of Corp are filed with Secretary of State UNLESS delayed effective date is specified.
Must contain: (1) corporate name (2) number of shares authorized to issue (3) address of initial registered office and name of registered agent (4) name and address of each incorporator
De Jure Corp
legally formed when Articles filed with Secretary of State. illegally formed corporations cannot enter into K obligations unless de facto or estoppel applies
De Facto Corp
enjoys same benefits and powers as properly formed corps. exists where: (1) made in good faith attempt to incorporate (2) eligible to corporate and (3) took some action indicating that is considered itself corp - ONLY a person who was unaware that corp was not properly formed may assert doctrine
Corp by Estoppel
any person/entity treated as business as a corp may be estopped from denying business is corp, even if not valid if (1) 3P treated business as corp AND (2) entity held itself out as corp and benefitted from claim
DOES NOT apply to tort actions
SH Voting Agreements & Trust
Voting Agreement: specifically enforceable & governed by K law, (1) in writing (2) signed by all parties (3) no durational limit. Cannot remove SH right to elect/remove directors
Voting trust: (1) only last for 10 years (2) legal ownership of shares transferred to trust and (3) SH provide trust agreement to Secretary of corp
Compensation of D&O
BoD is allowed to determine compensation unless stated in Articles or bylaws.
Duty to set compensation w/reasonable parameters - can’t commit waste of corp assets
Removal of D/O
D: vote of majority by SH for cause or without case UNLESS articles set forth cause required. SH must be allowed to removed for public policy
O: any time with or without cause by (1) BoD (2) officer who appointed officer (3) any authorized officer
Direct and Derivative Actions
Direct: injury or breach of a duty owed to SH - damages paid directly to SH.
Derivative: SH suing to enforce corp’s claim - damages paid to corp but SH may recover litigation expenses. P must (1) be a SH at time of act or omission (2) SH through entry of judgment (3) fairly and adequately represent interest of corp and (4) written demand on corp to take action (5) cannot be commenced until 90 days after demand UNLESS (a) corp rejects demand (b) corp suffer irreparable harm if forced to wait or (c) demand would be futile
Fundamental Changes
Must be approved by majority of total votes entitled to be cast for corp
Includes: merger, consolidation, amendment to Articles, sale of all or substantially all corp’s assets, dissolution
Must hold special meeting = requires notice mailed to SH, including reason, date, time, place.
10b-5
P must show that D: (1) engaged in fraudulent scheme or device (2) relied upon (3) connection w/purchase or sale of security (4) acted with scienter (actual knowledge/reckless) (5) used means of ISC and (6) caused damages
Fraudulent Scheme includes: (1) misrepresentations of material facts (2) insider trading or (3) tipping
P must be: (1) SEC (2) connected w/sale or purchase
Section 16(b)
requires D/O/SH owning more than 10% of corp must surrender any profits realized to the corp from a sale or purchase of equity securities within 6-months period when the corp is (1) publicly traded on national stock exchange or (2) more than $10mill in assets and at least 2K SH
Corp is entitled to recover maximum difference btw sale and purchase price during 6-months period
