Business Law Final

What type of Business entity must be filed with the Tennessee Secretary of State and Register of Deeds

Corporation, LLC, limited partnerships, and limited liability partnerships

How is a corporate signature supposed to look

Tony's Pizze, Inc.

By: Tony Saunders

President

What officers must a corporation have?

President and Secretary

Sole Proprietorship

Single person business that is liable for everything

- There is no separate entity to tax

- Ceases to exist when the individual dies or goes out of business

General Partnership

Multiple people all of which are jointly and severally liable for the debts of the partnership

- managed by all partners

- individuals are taxed not partnership

- it ceases to exist when any partner dies

Limited Partnership

Multiple partners managing the business, and one more limited partners who act as investors who don't have an active role in management

- general partners are jointly and severally liable for the debts of the partnership

- The partnership itself is not taxed

- Certificate of LimitedPartnership must be filed with the Tennessee Secretary ofState and the Register of Deeds. It must also file an annual report with theSecretary of State

Corporation

A separate legal entity owned by shareholders, managed by aboard of directors, and operated on a day to day basis by officers

- the shareholders, officers and directors are not liable for the business debts

- Managed by a boardof directors

- double taxation

- A charter must be filed with the Tennessee Secretary ofState and Register of Deeds

Limited Liability Company

hybrid between a corporation and a general partnership

- Usually, taxation as an S corporation

- it must file Articles of Organization with the Tennessee Secretary of State and the Register of Deeds

- Managed by members or managers, or a board of directors.

What is a franchise?

a company that offers similar products or services in many locations

Duty of Loyalty

can't have conflicts of interest

Duty of Care

business Judgement rule, when you're the manger you are supposed to do a good job

Promoter's Liability

personal liability that may be faced by someone purporting to act on behalf of an entity that is not yet properly formed.

Name requirements for each entity

Inc., Co. or Corp = or a corp.

LLC, L.L.C. or a Limited Liability Company

Two ways Shareholders can vote?

Straight Voting: a common way of voting

Cumulative Voting: gives them an advantage

What is Cumulative Voting

Each shareholder gets as many votes per share as there are director seats being contested. The shareholders can spend them anyway they want (eg all for one candidate) Candidates getting the most votes win.

Three ways you can sell a corporation?

Asset Sale= company is not buying its debts

Merger= takes on all liabilities

Stock Sale = Buying the shareholders

Three types of Bankruptcy:

ch 7- liquidation

ch 11- reorganization for businesses (they continue working)

ch 13- reorganization for individual wage earners

Securities Act of 1933

regulates the initial issuance of "securities", prevents fraud

Securities Exchange Act of 1934

regulations the subsequent buying and selling of previously issued

Securities (prohibited something)

Contract Consideration:

exchange of promises (both parties have to give something)

- Doesn't matter how much the promises are worth (Peppercorn Theory)

Licensing statutes

an agreement with an unlicensed individual is unenforceable by the party who should have obtained the license; the contract is voidable

Restraint of Trade

Non-compete agreements (an employer requires that an employee sign as a condition of employment) - are for the most part unenforceable after the recent Federal Trade Commission Ruling.

Exculpatory Clauses

a contract clause that attempts to pre-release a party from any future liability to the other party

- the law disfavors pre-waivers of liability

- Exception - "bailment relationships" (i.e., you leave your clothes in alocker at the gym)

Capacity of Contracts: At what age can you partake in a valid contract??

Age 18 and at age 40 you are protected from age discrimination

Mentally Impaired Persons & Intoxication

if a person is not able to understand the nature of the agreement they are making then the contract is voidable.

What is Parole Evidence Rule in written contracts??

prohibits either of the parties from introducing other

evidence at a trial to contradict or add to the written terms of the contract

What is third party beneficiary?

** In order to have the right to sue for the enforcement of a contract that you are not a party to, one must be

a "third party beneficiary" to the contract

- must have been contemplated as a third

party beneficiary

- benefit from a contract

example: subcontractors

Condition Precedent

arising at the outset of a contract (a real estate purchase agreement with the

condition of buyer financing), if one doesn't get a financing can they buy the house? NO

Time of the Essence Clauses

provides that deadlines in a contract are to beconstrued strictly and if missed by one party discharges the other party fromperformance (i.e., if your rent payment is one day late the landlord may bedischarged from the duty to continue leasing the apartment to you)

Anticipatory Breach as a defense to performance

informing your boss that you are leaving the company

Remedies: Types of Damages

Direct Damages= flow directly from the contract and must be reasonably certain

Consequential Damages= result from the unique circumstances of the injured party in question, Damages must be foreseeable

Incidental Damages = out of pocket costs resulting from the breach

Three types of patents

utility, design, plant

- Plant and Utility have a longer time of protection

- in order to get a patent you must invent something, not discover

Copyright:

Owns the particular tangible expression of an idea (not the idea itself).

-The term generally covers the life of the creator plus 70 years, as to individual creators of copyrighted material)

-You get protection before filing with the office

First Sale Doctrine

allows the lawful owner of a copyrighted item to resell, lend, or otherwise distribute that specific copy without needing permission from the copyright holder.

Employment at Will Doctrine

common law doctrine which states that in the absence of an employment contract, an employee can be hired and fired at will, without the necessity of showing cause. However, there are many exceptions to the doctrine.

Intentional Infliction of Emotional Distress

a tort for work-place bullying

Family and Medical Leave Act

Allows for up to 12 weeks of maternity leave and any medical conditions

OSHA

workplace safety, think hard hats

FLSA

addresses minimum wages, overtime and child labor restrictions

Title VII of the Civil Rights Act of 1964

prohibits all employers with 15 or more employees from discriminating on the basis of race, color, religion, sex or national origin.  It also creates the Equal Employment Opportunity Commission (EEOC), which is a federal agency that enforces the Act.  If a person seeks to sue under Title VII they must first file a claim of discrimination with the EEOC, which analyzes the claim and decides whether it wishes to become involved in the suit.  If not, it issues a “Right to Sue” letter, which gives the plaintiff permission to proceed with their lawsuit.

Sexual Harassment - prohibited by Title III

There are 2 types

quid quo pro = authority figure (e.g., a manager) demands a sexual favor in exchange for job benefits, such as a promotion, raise, or avoiding disciplinary action

hostile work environment = Involves pervasive or severe behavior (e.g., jokes, comments, gestures) that creates an intimidating or offensive atmosphere, but not necessarily linked to specific benefits or consequences

Americans with Disabilities Act

federal law requiring employers to make reasonable accommodations for disabilities. They cannot refuse to hire, nor can they fire, an employee just because of a disability if a reasonable accommodation would allow the employee to perform their job

"Real Property" includes:

surface of land, subsurface rights, permanent buildings, air space to some level, plant life, and fixtures

What is the most complete way you can own land??

Fee Simple Absolute

Joint Ownership in Land

-Joint Tenancy with Right of Survivorship= when one partner dies the land goes to the other

- Tenants in Common= if one dies then the land goes to their heirs

-Tenants by the Entireties=

License

right to be on someone else's property for a limited period of time,such as with an event)

Adverse Possession

if you do not actually own the property but act as if you do for about 7 years, then the law proclaims you to be the owner

What is not a valid offer?

 Price Quotes, Letters of Intent and Advertisements are not generally offers

Sources of Contract Law

common law and the Uniform Commercial Code

Tenancy for Years

for a stated, fixed period, start and end dates

Periodic Tenancy

lease for a fixed period that automatically renews