'Legal Business Studyguide\r'

' judiciary-ordered 2 Test 2 Studyguide Sole Proprietorships the simplest pee of descent organization. Sole possessorships ar the most usual form of soulfulnessal credit line organization in the US. major(ip) advantages: * Forming a fix ownership is easy and does non cost a lot. * The owner has the right to pee whole management decisions concerning the transmission line, including those involving hiring and firing employees. * The sole possessor owns altogether of the military control and has the right to receive all of the business’s lettuce. A sole proprietorship flush toilet be easily transferred or change if and when the owner desires to do so; no some some other encomium (such as from partners or distributeholders) is necessary. Disadvantages: * The sole proprietor’s access to the capital is limit to person-to-person funds plus any loans he or she can obtain * The sole proprietor is licitly responsible for the business’s contr p ropels and the torts he or she or any of his or her employees commit in the descent of employment. Creating a sole proprietorship is easy. on that point argon no formalities, and no federal or give in government approval is supplicated.A sole proprietor bears the risk of expiration of the business. In addition, the sole proprietor has un special(a) individualised liability. Therefore, creditors may recover claims against the business from the sole proprietor’s personal assets (e. g. , home, automobile, margin accounts). A sole proprietorship is not a separate judicial entity, so it does not redress valuees at the business level. Instead, the earnings and losses from a sole proprietorship be reported on the sole proprietor’s personal income valuate filing. A sole proprietorship business earns income and pays expenses during the course of operating the business.A sole proprietor has to file tax returns and pay taxes to state and federal governments. For f ederal income tax inventions, a sole proprietor must tack together a personal income tax Form 1040 U. S. various(prenominal) Income Tax Return and report the income or loss from the sole proprietorship on his or her personal income tax form. The income or loss from the sole proprietorship is reported on Schedule C (Profit or Loss from Business), which must be attached to the taxpayer’s Form 1040. Vernon v. Schuster The founding father dies and the son takes over the sole proprietorship. Vernon had a warranty while the father was alive, and he warranty was broken beca lend unrivaledself the product had failed so he wanted money from the son who took over the job. The court ruled that the son had form a newborn sole proprietorship and was not nonimmune for his father’s warranty. federations a voluntary association of some(prenominal) or much persons for carrying on a business as co-owners for profit. Partners are personally liable(predicate) for the debts an d obligations of the fusion. shaping four criteria to qualify as a commonplace union: * As association of two or to a greater extent persons * Carrying on a business * As co-owners * For profitAn reason to assign losses of a business is strong evidence of a planetary partnership. It is get evidence of the existence of a planetary partnership if a person is given the right to share in profits, losses, and management of a business. A special(a) partnership agreement may specify how profits and losses from the limited partnership are to be allocated among the general and limited partners. General partnerships do not pay deferral income taxes. Instead, the income and losses of partnership full stop onto and pitch to be reported on the individual partners’ personal income tax returns. This is called â€Å"flow-through” revenue enhancement.A new partner in a general partnership takes on all of the liabilities and responsibilities that the original partners take over. Zuckerman v. Antenucci A woman’s kid was born with severe physical problems. During her pregnancy, she was treated by Dr. Pena and Dr. Antenucci. She brought a medical malpractice suit against both doctors. The venire (trial court) found that Pena was guilty of medical malpractice but Antenucci was not. The arbitrary Court found both doctors to be dually liable. express Partnerships a type of partnership that has two types of partners: (1) general partners and (2) limited partners.Two types of partners: * General partners partners in a limited partnership who invest capital, manage the business, and are personally liable or partnership debts. * Limited partners partners in a limited partnership who invest capital but do not participate in management and are not personally liable for partnership debts beyond their capital contributions. Once a limited partnership has been formed, a new limited partner can be added only upon the compose consent of all partners, unle ss the limited partnership agreement provides otherwise.New general partners can be admitted only with the peculiar(prenominal) written consent of each partner. Uniform Partnership flake In 1914, the National Conference of Commissioners on Uniform State Laws promulgated the UPA. The UPA codifies general partnership right. Its goal was to establish consistent partnership law that was uniform throughout the US and has been adopted by 48 states. Fictitious names A general partnership must file a imitation business name statement â€d. b. a. (doing business as) â€with the assume government agency to operate under a trade name. Kemmier Memorial Foundation v.Mitchell Davis and Mitchell formed a general partnership to purchase and operate term of a contract properties for investment purposes. They entered into an agreement that provided that only Davis, and not Mitchell, would be personally liable on the note to the Foundation. They did not inform the Foundation of this agreement . They defaulted on a note, so the Foundation sued the partnership and both partners to recover on the note. The Supreme Court of Ohio held that both partners were jointly liable on the note. Corporations the most dominant form of business organization in the US, generating over 85 pct of the country’s gross business receipts.Owners of confederations are called shareowners. In grass select a state, select a unified name, incorporators, pre-in green goddess contracts, articles of in locoweed, purpose of a community, registered agent ( frequently attorneys), corporate bylaws, corporate seal, organizational get together of the senesce of directors. intent of a Corporation: * General-purpose clause allows the fraternity to engage in any activity permitted by law * Limited-purpose clause stipulates the specific purposes and activities that the commode can engage in. piece of landholders have only limited liability.They are liable only to the extent of their capital contr ibutions and do not have personal liability for the tidy sum’s debts and obligations. Nature of the pile: * Separate â€Å"legal entity” for most purposes * Limited liability of shareholders * Free transferability of shares * perfect(a) existence * Centralized management * Double taxation Nonprofit Corporation formed for charitable, educational, religious, or scientific purposes. Although nonprofit corporations may make a profit, they are prohibited by law from distributing this profit to their members, directors, or officers.The Model Nonprofit Corporation Act, which governs the formation, operation, and termination of nonprofit corporations. Professional Corporation a corporation formed by lawyer, doctors, or other professionals. Promoter a person or persons who organize and start a corporation, negotiate and enter into contracts in advance of its formation, buzz off the sign investors to finance the corporation, and so forth. Registered Agents a person or corp oration that is empoyered to accept service of passage on behalf of a corporation.Incorporator the person or persons, partnerships, or corporations that are responsible for incorporation of a corporation. Bylaws a detailed set of rules adopted by the visiting card of directors after a corporation is incorporated that contains commissariat for managing the business and the affairs of the corporation. Organizational Meeting a meeting that must be held by the sign directors of a corporation after the articles of incorporation are filled. Articles of Incorporation the basic governing document of a corporation.It must be drafted and filed with, and approved by, the state forwards the corporation can be officially incorporated. must include: * The name of the corporation * The number of share the corporation is authorized to issue * The address of the corporation’s initial registered office and the name of the initial registered agent. * The name and address of each incorpora tor Debt securities securities that establish a debtor-creditor relationship in which the corporation borrows money from the investor to whom a debt security is issued.Notice of a Shareholders’ Meeting A corporation is required to give the shareholders written notice of the place, day, and condemnation of annual and special meetings. For a special meeting, the purpose of the meeting must also be stated. solo matters stated in the notice of a shareholders’ meeting can be considered at the meeting. Special Shareholders’ Meetings Meetings of shareholders that may be called to consider and balloting on definitive or emergency issues, such as a proposed merger or amending the articles of incorporation.Proxy a shareholder’s authorizing of some other person to vote the shareholder’s shares at the shareholders’ meetings in the event of the shareholder’s absence. Quorum required number of individuals that must be represent for voting, me etings, etc. Record Dates a date specify in corporate bylaws that determines whether a shareholder may vote at a shareholders’ meeting. Cumulative suffrage a system in which a shareholder can accumulate all of his or her votes and vote them all for one candidate or rake them among several candidates.Straight voter turnout a system in which each shareholder votes the number of shares he or she owns on candidates for each of the positions open; also called noncumulative voting. Supramajority Voting Requirement a requirement that a greater than majority of shares constitutes a quorum of the vote of the shareholders. Voting imprecate an arrangement in which the shareholders transfer their stock certificates to a trustee who is empowered to vote the shares. Voting cartel an agreement between two or more shareholders that stipulates how they will vote their shares.Right of First Refusal an agreement that requires a selling shareholder to tenderize his or her shares for trade to the other parties to the agreement before selling them to anyone else. pre-emption rights that give existing shareholders the option of subscribing to new shares organism issued in proportion to their current ownership interests. Dividends a distribution of profits of the corporation to shareholders. Derivative campaign a lawsuit a shareholder brings against an pique party on behalf of a corporation when the corporation fails to bring the lawsuit. It’s also called a first derivative action.Management of a Corporation * Shareholders Owners of the corporation. They vote on the directors and other major actions to be taken by the corporation. * mount of Directors Elected by the shareholders. Directors are responsible for devising policy decisions and employing the major officers for the corporation. The board may founder certain actions that require shareholders’ approval. * Officers Officers are responsible for the day-by-day operation of the corporation, incl uding acting as agents for the corporation, hiring other officers and employees, and the like. barter of loyalty a duty that directors and officers of a corporation have to act within the authority conferred upon them by state corporation codes, the articles of incorporation, the corporate bylaws, and the resolutions adopted by the board of directors. Fiduciary Duties the duties of obedience, care, and loyalty owed by directors and officers to their corporation and its shareholders. Duty of Care a duty of corporate directors and officers to use care and diligence when acting on behalf of the corporation.Duty of commitment a duty that directors and officers have not to act adversely to the interests of the corporation and to subordinate their personal interests to those of the corporation and its shareholders. Proxy Contest a contest in which opposing factions of shareholders and managers solicit proxies from other shareholders; the side that receives the superior number of votes wins the procurator contest. amalgamation a government agency in which one corporation is absorbed into another corporation and ceases to exist. They become a similar corporation. If it is a consolidation, the two companies form into a completely various corporation.Appraisal Rights the rights of shareholders who object to a proposed merger, share exchange, or change or lease of all or good all of the property of a corporation to have their shares valued by the court and receive currency payment of this value from the corporation. Proxy Statement a document that fully describes (1) the matter for which a proxy is being solicited, (2) who is soliciting the proxy, and (3) any other pertinent information. Share commuting a situation in which one corporation acquires all the shares of another corporation and both corporations retain their separate legal existence.Tender Offer an offer that an acquirer makes directly to a show corporation’s shareholders in an effort to acq uire the target corporation. The shareholders each make an individual decision rough whether to sell their shares to the tender offeror. Such offers are often referred to as hostile tender offers. Short-form Merger a merger between a parent corporation and a subsidiary corporation that does not require the approval of the shareholders of either corporation or the approval of the board of directors of the subsidiary corporations.Williams Act an amendment to the Securities Exchange Act of 1934 made in 1968 that specifically regulates tender offers. open frame for Executives after retiring or being distant from a company, they’re given a package. â€Å" lucky parachute” Section 14(a) a provision of the Securities Exchange Act of 1934 that gives the SEC the authority to regulate the allurement of proxies. Antitakeover Statutes statutes enacted by a state legislature that cherish against the hostile takeover of corporations incorporated in or doing business in the state .Poison Pills defensive strategies that are build into the target corporation’s articles of incorporation, corporate bylaws, or contracts and leases. These tactics make the target corporation more expensive to the tender offeror. White Knight Merger mergers with friendly partiesâ€that is, parties that promise to leave the target corporation and/or its management intact. Greenmail the purchase by a target corporation of its stock from an actual or perceived tender offeror at a premium.\r\n'