Bus law test 4 Review 1

Which of the following is NOT a part of being a sole proprietor?

Which of the following ISN'T true in a general partnership?

Which of the following ISN'T true about a limited partnership?

Which of the following IS NOT true about a limited liability company?

Provides a corporate veil: protects you from personal liabilities; protects the incorporator unless you do 2 things to be liable --- crime or fraud.

Allows you to have just 1 person for all positions

All the information about the birth of the Corporation must be filed with the Secretary of State

Can a member of a limited liability company be liable for more than they’ve invested?

Can limited partners in a limited partnership lose their limited partnership status?

If you do business in another state, not the home state

Doing business in another country

Direct officers what can be done to operate the business; telling employees what to do; a policy or manual giving authority to employees; it can be amended-- “the rules that regulate and govern the internal operations of the corporation. Must be followed by shareholders, directors, and officers “

T/F: Articles of Incorporation not easily amended like by-laws

S-Corp-No corporate income tax if ___ or less employees

T/F: If you’re publicly traded in stocks, stockholders own the corporation

Employer and employee agree on employment for a certain time or that job security is provided

May restrict the grounds for termination or require specific procedure to be followed in dismissal

A person who works for another person

Say the who principle is
- Example: Someone comes up to me and says, “you work for Stephanie?” I said, “Yes.” I can say it because I have Stephanie’s permission. I am a disclosed agent and Stephanie cannot sue for saying it or blame me for doing anything wrong.

Cannot say who the principle is but can say they represent someone
- I am going to give you a written document and make you my agent. You’re going to take my celebrity clients out. You’re going to be a partially disclosed agent.
- Example: Someone comes to me, “Do you work for Stephanie?” I have to say, “NO.” I am an agent and cannot say who the principal is.

This agent can never say who the principle is or that they even represent someone
- Cannot say anything to anyone who your principal is or say you’re an agent.

Relationship between agent and principal (and others) based on trust, loyalty, and confidence in each other

What are the duties a principal owes to an agent?

Perform responsibilities as agreed in agency

For authorized payments made by agent to 3rd parties on principal’s behalf

Pay for damages or to insure agent against losses suffered

What are the duties that an agent owes to the principal?

Places principal’s interests before agent’s personal interests; trust, honesty, and confidence for principal

Perform instructions provided by principal but no obligation to engage in acts that can lead to personal liability

For funds and property of principal

Keep principal informed of all facts relevant to agency

The servant is an employee who's conduct is controlled by the employer. A servant can also be and agent.

Agent acts on behalf of the principal, with a degree of personal discretion

Not an employee, and the employer does not control the details of this person's performance. This person is usually not an agent

When an agent secretly hires another agent for themselves, making the principal not liable. (In order for the principal to be liable, they have to agree. Then the agent has two titles-Tier system.

Acceptance of responsibility

Example: Principal not liable for subagent if not agreed by principal but if principal agreed liable for acts of subagents. Also liable for both – agent and subagent

Principal’s clear signal to be bound to unauthorized agreement

When principal behaves as if he/she has intent of ratifying agreement

Arises when the principal creates an appearance of authority in an agent that leads a 3rd party to conclude reasonably that the agent has authority to act for the principal

Real authority; given by principal, express/implied; changes the principal’s legal status–“given by the principle to the agent to change the principal’s legal status. It can be expressed or implied”

Employee at will, which are true?

I. Employers free to discharge employees for any reason any time
II. Employees free to quit for any reason any time