LEGAL ENVIRONMENT OF BUS
LEGAL ENVIRONMENT OF BUS BUSA 2106
Popular in Course
Popular in Undergrad Mgmt Honors
This 8 page Class Notes was uploaded by Helga Lemke II on Monday September 21, 2015. The Class Notes belongs to BUSA 2106 at Georgia State University taught by Edwin Palmer in Fall. Since its upload, it has received 16 views. For similar materials see /class/209870/busa-2106-georgia-state-university in Undergrad Mgmt Honors at Georgia State University.
Reviews for LEGAL ENVIRONMENT OF BUS
Report this Material
What is Karma?
Karma is the currency of StudySoup.
You can buy or earn more Karma at anytime and redeem it for class notes, study guides, flashcards, and more!
Date Created: 09/21/15
BUSA Test 2 Notes Common Law I Soleproprietorships o All about you 0 Easy to form 0 Low cost 0 Control rests with you 0 Pro tslosses ow to you 0 Single taxation But 0 Liability 0 Capitalization 7 how you gonna get the to start D General Partnership a joint undertaking that arises from an agreement express or implied between two or more persons to carry on a business to pro t 0 Flow through taxation 0 Easy to form 0 Joint control 0 Joint liability for contracts 0 Joint and several liability for torts o Dissolution Winding up Termination Dissolution 7 doesn t mean its all gone its not working lets close Winding up 7 once we decide to start closing you liquidate all the assets Why written agreements are good Because stories change 0 Buy sell agreement 7 any partner that wants to sell their share they need to offer their shares to existing partners rst 0 Fiduciagx you are the highest loyalty to the partnerships You cannot harm your partner or the company You cannot sign another partnership if it harms your current company or partners like if they are competitors Statutog Law I Limited Partnership LP 0 Statutory 7 certi cate of limited partnership 0 Limited partnership and general partner 7 the duties and obligations of both are almost like shareholders O 0 Limitation on limited partners liability if limited partner does not participate of management and keeps hisher name out of the partnership name UNLESS I They have the same name as the general partner I A lot of market value before you created the partnership Ben and Jerry Flow through taxation I Limited Liability Partnership LLP I Limite o O O O O O O 0 Partners All partners enjoy limitation on liability Joint operational control among partners Flow through taxation d Liability Limited Partnership LLLP Limited partner and General Partner Limitation on liability of general partner Limitation on liability of limited partner See limited partnership above same rule Flow through taxation I Flow through Taxation 9 business tax rates not a double tax Starts at your tax level instead of a corporation I Limited Liability Corporation LLC OOOOOOOO Combines aspects of limited partners and corporation Creature of statue Is a new business entity not a new form of corporation Composted of members generally with an operation agreement Flow through taxation Limited liability Full participation of all members Doesn t need presidents Negative 0 Statues from state to state are far from uniform In 1997 the IRS said they wont tax LLC as separate entity like they do to corporations Joint Venture 7 2 or more persons combining efforts for a single business undertaking Franchising 7 Papa Johns St Petersburg Governmental Agency 7 Eisenhower passed the SBA small business administration I Corporations Statutory 7 federal and state ShareholdersBoard of DirectorsOf cers Domestic7 any corporation that its in Foreign 7 from another state Alien Corporation out of the country like Japan I Before April 1 they must ll out an annual registration statement if you don t then you involuntarily dissolve the corporation Why To recon iin registered agent It costs O 0000 El Snbchapter Sub S corp in 1982 they took out double taxation on small businesses 0 Can avoid the imposition of income taxes at the corporate level while retaining many of the advantages of a corporation particularly limited liability o If it has a 100 or fewer shareholders 0 When the company has losses it allows the shareholders to use the losses to offset other taxable income El Private7 can serve public but its mostly private vs B Public Corporation 7 for public purpose ie post of ce Amtrak Partnerships have to be for PROFIT Corporations can go either way D Close Corporation 0 Allow a different set of rules 0 Has just a few shareholders 0 Easy to operate 7 you can operate a corporation like a proprietorship Cover yourself with a buysell agreement Formation of a corporation is a 2step process 1 Preliminary Organization watch out for promoters liability it can bite you 0 It s a good way to raise money they sign an agreement ofa share certi cated Subscription agreement is binding You make them sign a document saying its 50 per share but they don t have to pay it until the company is incorporated Because you use this promised money to start your business they have to pay 2 Legal process of Incorporating 0 An article of Incorporation is a public document that tells the world what the company is all about X amount is paid in capital You must register an agent of service lawyer Shareholders elect the board of directors and they elected of ces then create bylaws Bylaws are a set of internal rules on how you run the corporation I Disregarding the corporate entity piercing the corporate wall 0 Alter Ego Theory 7 using the company card to pay for your personal use Undercapitalization business was never capitalized Starts up a business then les bankruptcy after getting 0 Parent Subsidiary All ofthese let the court pierce the corporate veil It exposes the shareholders to personal liability E Business judgment rule 0 Before it used to be if you make a business judgment if it goes wrong then you weren t responsible 0 Then they saidyou need to read the books and then judge Then if you reviewed all the books and records and didn t get expert advice then you still might be personally liable 0 Even if you do all of that if the decision you and you thought was right it was reviewed and you got advice you still might be liable O E Corporate Opportunity Rule duty of loyalty you need to offer Requires directors and officers to subordinate their personal interest to the welfare of the corporation Similarly they must refrain from putting their personal interests above those of the corporation 0 Of cers elected by the board of directors to run the company They take care of daytoday stuff 0 Shareholders own the corporation If you own 1 share 0 stock you own part of the company You get dividends and you can sell them I Preemptive rights 7 retain treasury stock Sell it to raise money to give rights to existing shareholders in amount equal to what we now hold Cumulative Voting You have a right to vote but if you don t vote your right to vote cumulates o Merger vs Acquisition 7 one company acquires another company You get all their assets and liability o Consolidation 7 gives birth to a baby company I Contract 0 Legally enforced document 0 Contracts are all words how we interpret them 0 Requisites I Consideration I Capacity I Legality I Bilateral Contract 7 a promise for a promise For example LEI agrees to sell jeans to Target I Unilateral contract 7 promise for an act For example I ll give you all the bourbon if you mow the lawn C Express contract 7the intensions of the parties are fully and explicitly stated P E Implied contracts 7 intentions of the party are inferred based on words conduct history circumstances and the like prior words It s all subjective 0 Someone furnished some service or property 0 Someone expected to be paidp for that service or property the other party knew or should have known that the payment was expected 0 Defendant had a chance to reject the services or property and did not C Qnasi equity steps in to avoid unjust enrichment Equity is what s right and what s fair Fairness steps to avoid one party to get rich injustice For example when Palmer talks about dying in the class and the doctor bills him after saving his life I Valid Contracts 7legality capacity and consideration I Voidable contracts 7 generally that are good when they are made then can be declared voidable Goes back to capacity you can void it then if you want to El Void contracts 7 aren t any good Purpose of the contract is illegal its no good Palmers house of the rising sun 0 1977 GA Supreme Court A woman and a man stayed together for 22 years but weren t married Because they had sex she got no money Due to illegal or immoral consideration the contract was void 0 1997 Lesbians were together and wanted to split up They had a prenup But the original judge had to use stare decisis and had to rule that the plaintiff got not money But the other judges tiptoed around the law to enforce it saying the contract did not make them have sex so the contract was not void I Unenforceable Contracts Union contracts I Negotiated contracts 7 offers counter offers the fine art of horse trading I Contracts of adhesion 7the antithesis of negotiated contracts One party generally has superior bargaining power For example credit cards insurance policies bank accounts Formal vsInformal contracts 90 are informal Came from England Had seals to make the contract legit In most states stature of limitations increases Executory 7 contract that has not been fully performed Executed 7 when its fully completed Damages Compensatory you want to be compensated for your loss Nominal damages in name 10 100 Nobody got hurt its just a slap on the wrist Punitive not only you were injured but also it was a plot Its to punish Liqnidated 1994 if you breach the contract this is how the charges will be calculated Agreement Offer what was the intention of the parties Was there a meeting of the minds Offer needs to be 0 Reasonably de nite o Communicated 7 parking ticket 0 Not terminated 7 revoke rejection 0 How do you terminate the offer Acceptance 0 Mirror image 7 No alterations in the original deal I m gonna offer you the truck but you want me to paint it is a rejection Mailbox rule 7 put the acceptance in the mail Legal presumption that if you pit in the mailbox it is delivered Its presumed it was delivered that day the day it was post marked 0 Consideration Qnid pro Qno 7 something for something 0 Something of legal value 0 or legal determinant o If you give up something that you have a right to do then you get I Adequacy amount amount often irrelevant o Promise of a gift is not enforceable Preexisting obligationsmodification of contracts The marble kitchen top example from class You changed the color of it and you need to give consideration when you modify your need Accord and Satisfaction be careful very careful o If you write in the back of the check in accord and full satisfaction and if they cash the check in then you don t owe them anything That means you changed the agreement and they agreed on it Promissory and Estoppel 7 all about detrimental reliance 0 Made representations 0 You were stopped from making that promise Void Illegal Contracts if a contract is illegal or against public policy is void moving target it changes from experience Wagering agreement lottery Licensing Statues I Regulatory state requires license I Revenue Raising I Restrictive Covenant Covenant not to compete o Cant give your secrets away 0 Time geography reasonable need for protection I Do I have a need to restrict you if I m a lawyer I How long I And where In the whole state 0 Blue penciling 7 judge scratches and write in what s fair 0 And it varies from state to state I Exculpatory clause ski lift its not our fault if you die I Voidable contracts 0 Most often about capacity or lack thereof Lack of reality of consent Can be voided by one party Most of the time its about minors when they re 17 they can make the contract voidable 000 I Minors Contract 0 Don t have to pay unless for the necessaries I If you go to the Ritz Carlton and trash it while you were 17 years old you wouldn t have to pay for it But if you did it at some run down hotel you should I Alcoholics crazy people can be voided from contracts Mental impairment intoxication I Sometimesvoidable due to 0 Fraud 0 Unilateral mistake 7 I make the mistake o Bilateral mistake 7 both are wrong I Duress 7 if you threaten before contract I Statue of Frauds 7 contracts require writing 0 000000 Here s a phrase from England Must be in writing Anything related to land equal dignities rule Contracts taking longer than one year or soft of relates to land Promises to pay the debt of another Prenuptial agreement Sales of goods in excess off 50000 C Discharge of Contract 0 0 Condition precedent 7 gotta meet grade Condition subsequent 7 random drug test Condition concurrent 7 2 things happen at the same time Substantial performance vs Total Performance I Remedies 7 compensatory damages 0 O Equitable 7 specific performance 7 the court can make you do something Injunctive relief
Are you sure you want to buy this material for
You're already Subscribed!
Looks like you've already subscribed to StudySoup, you won't need to purchase another subscription to get this material. To access this material simply click 'View Full Document'