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Study Guide for the Final

by: Sara Hashemzadeh

Study Guide for the Final Business law

Sara Hashemzadeh
Cal State Fullerton
GPA 3.5

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Hi everyone! This is the Study Guide for Charles Smiths final for Business Law. Good luck on the test and I hope this helps.
Charles Smith
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This 7 page Bundle was uploaded by Sara Hashemzadeh on Saturday May 14, 2016. The Bundle belongs to Business law at California State University - Fullerton taught by Charles Smith in Summer 2015. Since its upload, it has received 312 views. For similar materials see Managment in Business Management at California State University - Fullerton.

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Date Created: 05/14/16
Study Guide for MGMT 246 with Charles Smith Final Business organizations: Corporations are “traditional” business entities  Sole Proprietorship – One person owns the business/ are liable for everything/not have to share profits with anyone/ files no tax return EXAMPLE: Wedding planners, photographers, personal piano teacher…  General Partnership – 2 or more people own the business and share/ each partner has power proportionate to partnership interest/ unlimited personal liability for any business losses. EXAMPLE: Oliver and Charlie bike business… two people own the business  Limited Partnership- 1 main owner and 1 limited owner/unlimited liability for any business losses/debts/judgments/No liability for any business losses/debts/judgments. EXAMPLE: Oliver and Charlie bike business… however Charlie has not as much power or say as Oliver does, maybe because Oliver invested more money in the business… “New” business entities  Limited liability partnership (LLP) – some or all partners have little to no liabilities/No liability for LLP losses/debts/judgments/pays no income tax. EXAMPLE: big 4 accounting firms, Ernst & Young (E&Y), PricewaterhouseCoopers, Deloitte & Touch, KPMG  Limited liability Company (LLC) - combines the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation. EXAMPLE: governed by states is a corporation and a partnership in one… all members are owners of the company/ Blockbuster was an LLC Key issues with suing against a business: businesses can be liable to plaintiff and have a judgment against them, but business can file for bankruptcy or no longer have money by the time a legal action is taken against them. Money sources for the business:  Equity - Money invested by someone who wants to be an owner (AN INVESTMENT)  Debt security – money borrowed by business (A LOAN) Corporations Separate legal entity owned by one or more shareholders. Shareholders may control corporation on day-to-day basis. Corporation started by incorporator or promoter. Government Documents to know for Corporations  Articles of Incorporation – usually very general; the date of filing with the California Secretary of State marks the date of incorporation.  By-Laws – rules and regulations of the corporation; usually quite detailed. Components of a Corporation: Shareholders – corporation’s owners, who appoint/people who vote for the directors. Directors – set policy and business direction, make big decisions, people who hire the officers. Officers – in charge of the corporation on day-to-day basis, people who hire the employees. Employees – the folks who do the real work. Advantages and Disadvantages of Corporation: Advantages:  Shareholders assets are protected by Corporation  Shareholder has no liabilities  Shareholder has an established type of business organization. Disadvantages:  Shareholder must pay corporation tax and a shareholder tax  Many legal requirements in order to protect the corporate veil for shareholders. Some terms about corporatization: “Alter ego liability” –corporation’s shareholder can be personally liable for corporate loss/debt/judgment. “Corporate veil” – legal barrier between corporation’s creditor and shareholder Examples of when Corporate veil may be pierced:  Commingling personal and corporate assets/ funds. EXAPMLES: Mixture of clubs, frat, sorority. Corporate doesn’t want mingling, no mixing. It has to be personal, keep them separate from corporate bank account.  Failure to comply with corporate formalities such as annual meeting, filling with the state. EXAPMLES: If there’s no meeting or minutes contributed then it is ILLEGAL.  Undercapitalization EXAMPLE: insufficient funds in the corporate bank accounts to cover usual expenses… in his or her asset. Law of Agency It involves people or the business being liable for misdeed committed by another person or business. Terms: Teacher’s definition for Agency - General label for agency relationship is principal-agent; more specific labels are employer-employee and employer- independent contractor; agency relationship is often simply called an “agency.” Agent- is someone who acts on behalf of a business entity or another person. (Do not need a financial relationship) To find if Agencies Exist:  Agency by agreement - most common way to create an agency. (in writing or oral.) EXAMPLE: employment contract, contract between homeowner and plumber for plumbing work.  Agency by ratification – principal’s subsequent approval of action or acceptance of benefits due to action by person. EXAMPLE: You paint someone’s house and told them that person afterwards that you painted their house however the person thought it was nice and paid you anyways.  Agency by estoppel – principal’s act. EXAMPLE: Don’t say that’s your boss if it’s not true. (Agent is not permitted to make personal profit based on confidential information learned during agency)  Tipper/tippee liability – gives out inside information for stock buyers EXAMPLE: Martha Stewart case  Misappropriation theory – someone outside of company is given info and buys and sells stock to make profit. AGENT MUST BE: COMPENSATED, REIMBURSED, AND INDEMNIFICATED. Three factors in IRS Publication 15A  Behavioral control.  Financial control.  Type of relationship (pages 7-10 only). Workers Compensation: Benefits available to employees only, not independent contractors. Employee’s injury must  Be the result of an accident no matter who caused accident.  Occur in the environment of work/during work  If both are present, then worker’s compensation is employee’s exclusive remedy against employer. Employees’ Privacy Rights Drug testing – generally cannot be required of an employee but there are some exceptions:  Public safety job.  Pre-employment.  Employment or union contract. Title VII – Federal Employment Discrimination Law !!!Prohibits discrimination in employment on the basis of race, color, religion, national origin and gender!!!!! Disparate treatment - Person intentionally treated (unfairly) differently. EXAMPLE: Company will not hire blacks or promote women Disparate impact - Employment policy, job qualification EXAPMLE: Minimum height requirement Sexual Harassment Sexual harassment in the workplace involves sex but is really about the employer’s power trip/abuse of authority, two types. Hard to prove that is was done. Quid pro quo – typically shown by request by employer/supervisor for sex in exchange for employee’s getting or keeping job, promotion, etc. Hostile environment – usual situation is workplace atmosphere of comments, conduct, decorations. Intellectual Property “Intellectual property” is the result of intellectual/creative processes. EXAMPLES: your textbook, “Jack” of Jack in the Box, the latest CD by Taylor Swift. Types of Intellectual Property:  Trade Mark: any word, name, symbol, or device, or any combination thereof. To identify and distinguish his or her goods, including a unique product, from those manufactured or sold by others and to indicate the source of the goods, even if that source is unknown. EXAMPLE: Design/color scheme of product or business – McDonald’s “Golden Arches” Company name such as Honda or NASA.  Patent: is a grant from the federal gov’t that provides an exclusive right to make, use and sell anything. EXAMPLE: recipe for food or drink, machine or any part of it (such as flat-screen monitor or mouse as part of PC), design for product (such as piece of paper or DVD).  Copyright: the exclusive legal right, given to an originator or an assignee to print, publish, perform, film, or record literary, artistic, or musical material, and to authorize others to do the same. EXAMPLE: “I Knew You Were Trouble When You Walked In” (music and/or words), movie such as “The Terminator” or its sequels or spinoffs (theatre, TV or DVD), “The Hunger Games” series (book or movie).  Trade Secrets: a trade secret has three basic characteristics: It is secret. It confers a competitive advantage on its owner. It is subject to reasonable efforts to maintain its secrecy. EXAMPLE: Ex-employer makes accusation that former employee stole customer list or secret formula. Stealing recipes or marketing tragedies. Victim can sue for damages. Disclosure: This Study Guide is composed of my own notes, Charles Smith’s notes, and some Law definitions obtained online.


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