Business Entities/Corp Law Flashcards

Agency Review Problems

• Topics Covered:

  • Agency Review Problems

  • Bankruptcy Review Questions

  • Discussion of Business Entities:

    • Sole Proprietorship

    • General Partnership

    • Corporation

    • S-Corporation

    • Limited Liability Company (LLC)

    • Professional Corporation

    • Limited Liability Partnership (LLP)

    • Nonprofit Corporation (Private Foundations vs Public Charities)

Agenda for Last 2 Classes

• **Key Concepts: **

  • Benefit Corporations vs "B-Certified" Corporations

  • Decision Poll: Interested in review session for final exam at the end of last class? Bring questions!

  • Note: Any material not covered in class will not be on the exam.

  • Review final exam instructions on Bruinlearn.

Instructions for Final Exam

1. Materials: Bring your laptop (online exam).

2. Entrance: Arrive early for ID check.

3. Content Coverage: Exam covers material from videos and classes supported by the textbook.

4. Exam Format: Similar question style to online assignments and midterms, focusing on application of concepts.

5. Time Allocation: 2 hours to complete; points deducted for late submissions.

6. Answer Review: No review of answers post-submission; candidates may leave after submission.

7. Grade Weight: Represents 45% of your final grade with 36 multiple choice questions, 8 true/false questions, and 2 short answer questions (20 points total).

8. Inquiries: Students may ask questions during the exam.

9. Curved Grades: Final grade based on a curve calculated from all scores on assignments and exams.

Assignment Questions

Assignment #4: California's "ABC Test"

• Background:

  • Established in the Dynamex Operations West, Inc. v. Superior Court case, codified by AB 5.

• Purpose: Determine if a worker is an independent contractor or an employee.

• ABC Test Criteria:

  1. (A) The worker is free from control and direction of the hiring entity in both contract and fact.

  2. (B) The worker performs work outside of the hiring entity's usual business.

  3. (C) The worker operates independently in their established trade or business.

Case Analysis: Lena's Status

• Lena is a freelance graphic designer working for Bright Marketing Co.

• Contract specifics:

  • Work from home using personal equipment and flexible schedule.

  • Invoicing for services.

• Issues: Bright Marketing expanding to include graphic design raises questions about her classification.

Assignment Question #2: Jenny's Authority at DotBomb, Inc.

• Context: Jenny, a salesperson for DotBomb, sold a large advertising contract.

• Issue: Did she have authority to enter this contract without prior CEO approval?

Agency Law Case Study

• Helmut's Management at Vircon:

  • Incident involving Helmut causing an accident; legal implications for company liable.

  • Liability discussion may include:

    • Vicarious liability principles.

    • Shareholder responsibilities and lack of adequate insurance coverage.

Business Entity Analysis

• Sole Proprietorship:

  • Definition: A natural person runs the business and is personally liable.

  • Formation: No formalities; profits reported on the proprietor's tax return.

• General Partnership:

  • Definition: Two or more co-owners engage in business.

  • Formation: No formalities; recommended a written agreement.

  • Taxation: No taxes on the partnership level; individual partners report income.

Definitions and Distinctions

Corporations

• Definition: A separate legal entity with distinct liability protections for shareholders.

• Formation: Filing Articles of Incorporation; subject to double taxation.

• Management: Directed by a board; authority distribution clarified.

Nonprofit Corporations

• Functions and Regulatory Requirements:

  • Vary according to 501(c)(3) classifications and specific state regulations.

  • Ability to engage in certain charitable activities without tax implications.

Considerations for Nonprofits

• Common Misconceptions:

  1. Profit making capabilities.

  2. Tax exemption limits.

  3. Salary limitations.

Conclusion: Exam Preparation

• Review all discussed topics extensively to prepare for the final, focusing on application-oriented questions and case studies.

• Engage actively in last classes and bring pertinent questions for clarification.