Law 2022 Final

Traditional forms of business (C corp)

corporations
general partnerships
sole proprietorship

hybrid forms of business

- Limited Liability Company (LLC)

- S Corporations

criteria for evaluating business forms

formation and nontax costs

management structure

limited liability (share holders)

transferability of ownership interests

duration of existence (you die your sole proprietorship dies)

taxes (sole proprioterships/partnerships don't pay)

capital structure

corporations

formation and nontax costs

incorporator files articles of incorporation with the state of gov

board of directors

appointed by incorporators in an organizational meeting
appoint officers and adopt bylaws

Centralized Management

ownership is separate from management

board appoints officers (CEO,CFO, VP, secretary)

directors and officers have fiduciary duties to the corp

Business Judgement Rule

decisions made by loyal and informed board will not be overturned

unless cannot attributed to any rational business purpose

shareholders must provide evidence of breach of fiduciary duty

failing which, decision will not be over-ruled

limited liability

liability of shareholders is limited to loss of their investment in corp.

piercing corporate veil

piercing corporate veil

application of doctrine leads to loss of limited liability in closely held corporations

elements

elements

misuse of corporate form

unjust result if limited liability is allowed to stand

transferability of ownership interests

federal securities laws impose board restrictions on transfer of publicly traded stock

buy-sell agreement

duration of existence

corporations have indefinite duration

voluntarily termination

taxes

corporation is subject to taxation in its own right

double taxation

Capital Structure

balance between debt and equity

equity capital has long term horizon

debt capital can be short or long term

general partnership

two or more persons who carry on a business as co-owners

Partnership Interest

equity interest of a partner

partnerships (formation and nontax costs)

co owners must join sharing risks and rewards via active conduct of business

partnership agreement

partership accounting systems are expensive

partnership agreement

contract that creates and governs partnership

specifies terms of the relationship

partnerships management structure

-no centralized
-centralizing management is beneficial if partnership grows
-partners owe fiduciary duties to each other

General partners liability

personally liable for partnerships obligations should it default

partnerships limited liability

not offered in general partnership

partners jointly and severally liable for contract obligations and tors under RUPA

partnerships (transferability of ownership interests)

partnership interest cannot be transferred to 3rd person without unanimous consent of other partners

partnership (duration of existence)

partnership automatically dissolves upon death, incapacity, bankruptcy, expulsion, or withdrawal of partner

partnership (taxes)

partnership agreement can detach percentage ownership from stream of distributions and tax consequences

double taxation doesn't apply

capital structure

limited liability companies (LLCs)

creation requires owners to file articles of organization with the state

owners are known as members

members interests-ownership units

operating agreement

minor annual fillings and fees are required

members interests

ownership units

limited liability companies (LLCs) advantages

flexible and variable management structure

economic and tax flexibility

closely resemble corporations with regard to limited liability and duration of existence

closely resemble partnerships with regard to tax and opportunity for economic customization

hybrid partnerships

limited liability partnerships

limited partnerships

limited liability limited partnerships

managing lawsuits

addressing and mitigating risk of employment

gov regulations and court decisions have widened employee rights

job classification

employment related legal rights and responsibilities depend on employer-employee relationships

long-term direct relationships are being replaced with non traditional arrangements

Independent Contractor

person who enters contractual relationship with org to perform specific task

Determined degree of control

business hires an independent contractor isnt required to comply with employment and labor law standards

classification problems

employers improperly classify workers to reduce financial legal burdens

employers liable

bear legal responsibility for employees' accidents or wrongs

hiring or retaining an employee who subsequently causes harm to 3rd party

careless training or supervision

liable for acts outside scope of employment under negligence liability

liability

arises from doctrine of respondeat superior

enterpise not liable for acts of independent contractors

Scope of Employment

employers are liable to 3rd parties for harm caused by international or negligent acts of employees on the job

finding of employer liability doesn't excuse employee from personal liability

at-will employee

not under contract for a definite period of time and can be fired at any time

(exceptions) of protection from wrongful discharge

labor laws protecting union workers

equal employment opportunity laws that forbid dismissal of an employee for discriminatory reasons

judicial limitations on at will principles

express or implied employment contracts

implied covenant of good faith and fair dealing

public policy (leaving work for jury duty)

Equal Employment Opportunity laws (EEO)

forbid considerations that would undermine equal employment opportunity

authority to issue regulations and guidelines

authority to receive, initiate, and investigate charges of discrimination against employers

civil rights act 1866

provided newly freed black slaves with the same right enjoyed by white citizens

Brown v. Board of Education

supreme court forbade separate but equal schools

Civil Rights Act of 1964 (Title VII)

forbids discrimination in employment on basis of race, color, religion, sex, or national origin

Constitution discrimination protection

14th amendment protects citizens from discrimination via state gov action

due process clause of 5th amendment forbids discrimination by fed gov

14th amendment

protects citizens from discrimination via state gov action

due process clause of 5th amendment

amendment forbids discrimination by fed gov

state fair employment practice agencies

expands antidiscrimination protections in federal statutes

employment discrimination enforcement: litigation

victim files a complaint within a limited period of time with EEOC or state fair employment practices agency

many lawsuits are resolved in arbitration

Types of Illegal Employment Discrimination

disparate treatment
disparate impact
harrassment

Disparate Treatment

provided by title VII of 1964 civil rights act

addresses intentional discrimination by employer

plaintiffs must prove employers intent to discriminate with direct or indirect evidence

tests in which claims rely on indirect evidence

Disparate Impact

provided by title VII of 1964 Civil Rights Act

claims arise from unintentional discrimination

the analysis involves situations in which employers use legitimate employment standards

impose a heavier burden on the protected class

(can't discriminate against women/Asians so ill set a height requirement)analys

Analysis Requirements for disparate impact

plaintiff winds unless defendant demonstrates that employment policy is:
-job related
-business necessity

employer wins unless plaintiff demonstrates that an alternative less discriminatory business practice is available

Statutory Defenses of Title VII

Seniority

Job-related employee testing

four-fifths rule

Seniority

bona fide seniority system permits differences in wages and conditions of employment

Job-related employee testing

making hiring and promotion decisions

Sex discrimination claims under Title VII

disparate treatment

disparate impact

sex harassment

Bona Fide Occupational Qualification (BFOQ)

involved in inquiries of intentional sex discrimination cases

discrimination is lawful where sex, religion, or national origin is necessary to operation of business

Bona Fide Occupational Qualification (Essence)

employer can lawfully insist on a specific gender to fill a specific role due to the essence of the job

Bona Fide Occupational Qualification (excluded)

race and color

Equal Pay Act

forbids discrimination on paying wages to employees on basis of sex

unequal wage payments are lawful if paid pursuant to

seniority system
merit system
system that measures earnings by quantity or quality of production
differential based on factors other than sex

sex harassment Title VII protection

provides protection for both men and women
strives to maintain equal opportunity in workplace
women in authority are susceptible to harassment

sex harassment

verbal or physical conduct of a sexual nature:

becomes a condition of employment
becomes a basis for employment decisions
unreasonably interferes with work
creates a hostile working env.

sex harassment types

quid pro quo (sex for promotion)
-only by manager

hostile work env
-by anyone

sex harassment steps in analysis

proof of sex harassment

employer liability and affirmative defense

law of sex harassment

plaintiffs in same-sex harassment cases must show that behavior was motivated by:

sexual desire
general hostility to one or other gender
victims failure to conform to sexual stereotypes

retaliation

antiretaliation provision of Title VII

Americans with disabilities act (ADA)

Age Discrimination in Employment Act (ADEA)

Civil Rights Act 1866

prima Facie Case Requirements

participation in a protected activity

employment action disadvantaging plaintiff

casual connection between protected activity and adverse employment action

Ways of Affirmative Action

courts order implementation of action after a finding of wrongful discrimination

employers voluntarily adopt action plans

certain statues require action

employers adopt action to do business with gov agencies

early affirmative action law

1979 detailed qualities that allow a voluntary affirmative action plan in the private sector

1987 extended affirmative action to women

considerations to evaluate affirmative action

plan addresses a compelling interest

plan is temporary

plan is narrowly tailored to minimize layoffs and other burdens

Americans with Disabilities Act (ADA)

Seeks to remove barriers to a full productive life for persons with disabilities

forbiden discrimination in Americans with Disabilities Act (ADA)

employment
public accommodations
public services
transportation
telecommunications

regarded as having a disability

employer who incorrectly assumes and discriminates against an employee on basis of a disability violated ADA

Accommodating individuals with disabilities

ADA requires employers to make reasonable accommodations for disabled employees and applicants

Age Discrimination Emoloyment Act (ADEA)

protects employees 40 or older from employment discrimination based on age

permits to bring disparate treatment and harassment claims

defenses for age discrimination

termination based on legitimate nondiscriminatory reason

Age is BFOQ

property

anything owned or controlled

property rights

right to use as security
right to lease/lend
right to use
right to sell
right to possess
right to donate
right to destroy

Real property includes

land
buildings
subsurface rights (till the center of the earth)
air rights (till heavens)
plant life
water rights
fixtures

fixtures factors to consider

intent of parties
attachment
adaptation (key comes with house)

Personal Property acquiring ownership

-production
-purchase
-gift
-will/inheritance
-finding

Real Property acquiring ownership

purchase
inheritance
gift
adverse possession

Adverse Possession

if your using real property not your continuously, exclusively, adversely, openly

fee simple absolute (estates in fee)

greatest control

Fee Simple Defeasible (estates in fee)

may terminate upon occurrence of some event

life estate

estate for life of some named person

estates in fee

fee simple absolute and fee simple defeasible

leasehold

possessory interest for period of time

future interest

reversion
remainder

reversion

reverts to grantor

remainder

goes to 3rd party

Concurrent Estates

tenency in common
joint tenancy

Tenancy in Common

-an undivided interest
-equal rights of ownership/proportionate
-right to partition (divide property)

Joint Tenancy

-equal interests
-right to survivorship

easement

right to enter another's land for limited use

covenants

voluntary restrictions on use of land

zoning

state laws that permit local communities to regulate building and land use

3 ways gov can restrict property use

zoning
eminent domain
takings clause

eminent domain

power of gov to take private property for public use