Business Law Exam 1

Stare Decisis

To stand on decided cases

Who can make and change laws?

Congress and Legislature

What are concurring opinions?

Concurring opinions mean they agree with the final outcome (judgment) of a case decided by the majority, but differ in the legal reasoning, principles, or rationale used to reach that conclusion.

What is a dissenting opinion?

Court justice disagrees with the majority opinion and wants people to know why.

What is a majority opinion?

Represents the official decision of the court, agreed upon by more than half of the judges. It sets the legal precedent that lower courts must follow.

What is a unanimous opinion?

A specific type of majority opinion where all judges or justices agree on both the outcome and the reasoning.

Who is a plaintiff?

The person or entity who initiates a civil lawsuit by filing a complaint, claiming they have suffered harm or loss due to the defendant’s actions.

Who is the defendant?

The person or entity accused of wrongdoing in a civil case, or the person charged with a crime in a criminal case. They must answer the complaint.

Who is the appellant?

The party who lost in the lower court and is now appealing (requesting a higher court to overturn the decision).

Who is the Appellee?

The party who won in the lower court and is defending that win against the appeal.

What is the definition of Jurisdiction?

Jurisdiction means to speak the law.

How do you get/know if you have jurisdiction?

They get jurisdiction through statutes that let them know if they can hear it ex: if you live in that state etc. 

Why do you need jurisdiction?

You must have jurisdiction over the parties AND subject matter of the case, or you can’t hear/make a decision on it.

What is the Long arm Statute?

Long arm statute makes it so you can have jurisdiction over someone from a different state IF they violated one of our laws, injured one of our people, own or possess property in the state, commit some act here that cause injury, or committed a crime that caused injury to one of us outside of the state.

Why is the venue important?

Venue makes sense for it to be wherever everything happened but you can move to change it to your county or jurisdiction and the defense might move to change the venue.

How do you know if you have standias?

Does it involve you? if yes then you have standias. They don’t want to hear from you if you weren't involved.

What is subject matter jurisdiction?

It is a court's legal authority to hear and decide a specific type of case based on the nature of the controversy, such as civil, criminal, or bankruptcy, as defined by constitutional or statutory law. It is distinct from personal jurisdiction.

What is the definition of a corporation?

It is a legal entity. It is an entity that is separate from the state, from the people who work there or from the owners. It is an entity that is formed in compliance with the statutory requirements of the state it is incorporated in. It is an entity that is owned by stock shareholders. It is managed by its board of directors. Corporation entities have a type of shield from the people who run it. 

What are the 3 players in every corporation?

Directors, Officers, and Shareholders

What are directors?

officials who are elected by the shareholders and are responsible for the overall management of the corporation.

What are officers?

they handle HR issues, figure out how to get more people. They are hired by the board. They are subject to the oversight of the board as well as the shareholders

What are shareholders?

 they own the amount of the corporations as much as the stock they hold, they are not the ones who deal with day to day issues.

What is an Alien Incorporation?

Business incorporated outside the U.S

What is a C-Corp?

 Subtitle C, big corps like apple

What is a S-Corp?

Subtitle S, single taxation money that comes in is distributed to shareholders, officers, etc. Avoids double taxation. S corps need to be incorporated here in the US

What are Bylaws?

They serve as a "rulebook" for day-to-day operations, typically adopted during the initial stages of incorporation. Not required but should have them.

What are the duties of Corp Officers?

Corporate officers owe fiduciary duties of care and loyalty to the corporation and its shareholders, requiring them to act in good faith, in the company’s best interests, and with the diligence of a prudent person.

What is the definition or “mergers”?

Mergers are the process of one corp acquiring all of the assets and all of the liabilities of the acquired corporation and in result that entity becomes one with the one who acquired all. One survivor corp.

What is the definition of Consolidation?

Consolidation is combining entities to end in a new corporation. Ex: a and b combine to create c, there is no surviving corp, just a new corp.

What is the rule for mergers and consolidations?

 Directors of companies need to approve this, both shareholders of a and b must approve. 4 way approval = it happens.

What is the Business Judgement Rule?

It says these people (visionaries) will be immune from liability for the actions that would ultimately result in harm to the corporation, to keep encouraging the type of thinking that takes risks. IF they acted in good faith, and in best interest for the corp, so basically INTENT. 

What are the 6 ways to avoid takeovers?

Crown Jewel, Golden Parachute, Greenmail, Pac-Man, Poison Pill, and White Knight

Duties of shareholders?

Shareholders have a duty to act in good faith, providing capital, and voting responsibly on key corporate matters like electing directors, approving mergers, or amending bylaws.

What is the definition of a partnership?

an agreement between two or more person(s) to carry on a business as co-workers for profit

What did the UPA (United Partnership Act) do?

did not recognize partnerships as a separate and distinct entity.  In a partnership if one gets sued, the other is also in trouble. your liability starts the day you join a partnership. 

What did RUPA (Reformed United Partnership Act 2003) do?

The partnership is treated as a separate legal entity, meaning it can own property, sue, and be sued in its own name. We amended the uniformed partnership act to allow limited liability partnerships. Has single taxation.

What is automatically assumed in a partnership agreement UNLESS otherwise stated?

Unless otherwise stated in a partnership agreement, all partners have equal rights to management AND split profits evenly which is why you should have a partnership agreement. Majority rules control with exceptions to ordinary business decisions. 

What duties do partners owe to eachother?

They have fiduciary duties. You can't take opportunities for yourself. Can't usurp a corporate opportunity. Look for intent, to see if it’s breaching their duties. 

What are the distribution of assets?

1. Pay the firm creditors (in full!)

2. Loan from partners

3. Capital contribution

4. Split balance (refer to if you have a partnership agreement or not)

What is a sole proprietorship?

the simplest, most common, and unincorporated business structure owned and operated by one individual, where there is no legal distinction between the owner and the business. The owner receives all profits but is liable for all debts, losses, and legal actions.