Exam 3 Essay

Submitted By tiff9845
Words: 2578
Pages: 11

CONCEPTS - FINAL

CHAPTER 13 – BUSINESS ORGANIZATIONS

1. BUSINESS ORGANIZATIONS - WRITING/CERTIFICATE REQUIREMENT
2. BUSINESS ORGANIZATIONS - LIMITED LIABILITY
3. GENERAL PARTNERSHIPS - PARTNERS' RIGHTS AND DUTIES
4. LIMITED PARTNERSHIPS - CHARACTERISTICS
5. PIERCING THE CORPORATE VEIL
a. If the court pierces the corporate veil, the shareholders have unlimited personal liability for the corporate debts.
6. LIMITED LIABILITY COMPANIES – CHARACTERISTICS
a. LLC’s are treated like a corporation for liability purposes
b. LLC’s are treated like a PARTNERSHIP for tax purposes
c. An LLC is different from a general or limited partnership in that if an LLC is properly formed, all of the members of an LLC can limit their personal liability to third parties

CHAPTER 14 – EMPLOYMENT RELATIONSHIPS
7. * AGENT'S DUTIES TO PRINCIPAL
a. Loyalty- to place the principal’s interests above the Agent’s interests, not allowed to compete with the principal without permission.
b. Obedience- to perform in compliance with the Principal’s instructions
c. Reasonable care and skills- to perform as is “reasonable under the circumstances”
d. Accounting- account for the funds and property of the Principal
e. Inform- as to all facts of the Agency purpose
8. PRINCIPAL'S DUTIES TO AGENT
a. Cooperation- with the agent fulfilling the agency purpose
b. Compensation- for services rendered
c. Reimbursement- of “reasonable” expenses
d. Safe working conditions-as required by law
e. Indemnification (legal liability)-for legal liabilities incurred by the agent.
9. AGENCY - HOW IS ONE CREATED
1) A contract between Principal and Agent establishing an agency relationship does NOT need to be in writing or supported by consideration
10. AGENCY - HOW IS ONE TERMINATED
1) Unless otherwise agreed, either party may terminate at-will
2) Death by either Principal or Agent terminates the Agency by operation of law
11. AGENT'S AUTHORITY - ACTUAL/APPARENT
1) ACTUAL- Authority expressly communicated from the principal to the agent; what the principal tells the agent he may do
a. Actual authority- may be oral or written
b. Implied authority- what the agent “reasonably” believes he can do to accomplish a task given to him by his principal
i. An agent who signs a contract beyond their actual authority, are personally liable on the contract
2) APPARENT- the authority the agent appears to have based on the manifestation of the principal to the 3rd party
a. MANIFESTATION: words, actions, appearances; any kind of communication to a third party that can be traced back to the principal giving authority to the agent.
12. EMPLOYMENT-AT-WILL – CONCEPT AND EXCEPTIONS
Exceptions
a. FREE MARKET CONCEPT-
1. Employers: may hire and fire who they want
2. Employees: may work at will or quit when they want
b. Exceptions limiting the termination of employees:
1) Refusing to commit an illegal act
2) Performing a public duty (jury duty)
3) Public right (filing workers comp)
4) Whistle blowing
13. TORT LIABILITY OF PRINCIPALS AND AGENTS
a. Agents who commit torts during their employment are liable for that tort, even if they were directed to do the tort by their Principal
b. An employer is NOT liable for the torts of an independent contractor he has hired
c. An independent contractor is not an employee
14. DISCLOSED AND UNDISCLOSED PRINCIPALS - LIABILITY OF PRINCIPAL AND AGENT
1) DISCLOSED PRINCIPLE- is liable to a third party or the agent for the contract of the agent of the agent had actual authority
2) APPARENT AUTHORITY- the disclosed principle is liable
3) UNDISCLOSED PRINCIPLE- A principal is undisclosed when a third party does not even know that the principal exists; that is, it believes the agent is acting on behalf of himself
a. An agent is personally liable on a contract she enters into with a 3rd party on behalf of an undisclosed Principal, unless the 3rd party elects to hold the principal liable

CHAPTER 15 – THE REGULATORY PROCESS…