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SC ACCT 324 - Acct324test2CheatSheet

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Consolidated Omnibus Budget Reconciliation Act (Cobra)–when employees lose job/have hours cut to a point where theyre no longer eligible for medical benefits from their employer,they have right to continue receiving benefits under employer’s policy for up to 18 months by paying premiumsFamily & Medical Leave Act (FMLA)-requires certain employers to establish policies allowing all eligible employees up to 12 weeks of unpaid leave per 12 month period for an specified family occurrence (birth, adoption, illness)Fair Labor Standards Act (FLSA)-covers all employees engaged in interstate commerce, requires minimum wage of specified amount for all covered employees, specific amount raised periodically by the Gov’tEmployee Retirement Income Security Act (ERISA)-federal law sets min. standards for most voluntarily established pension & health plans in private industry to provide protection for those enrolled in those plans. Under ERISA, employers must provide participants: Plan Info (features & funding) ; assurances of fiduciary responsibility of those in charge, grievance & appeals process to receive benefits, Right to sue for benefits.Taft-Hartley Act 1947- Labor MGMT Relations Act-designed to limit some of the powers unions had acquired under Wagner Act. Amendment to Wagner Act, both combined known as National Labor Relations Act (collective bargaining). NLRA Good Faith Requirements- both employer & yee bargaing unit rep. must: meet at reasonable times & confer in good faith, sign a written agreement if one is reached, give 60 days notice to other party before modifying/terminating existing contract w/ offer to confer over proposals, & give 30 days notice to fed/state mediation services, neither strike nor engage in lockout during 60 day notice. Power of Attorney: document giving agent authority to sign legal documents on behalf of principal. Durable Power of Attorney: power of attorney intended to continue to be effective/take effect after principal incapacitated. Agency By Estoppel: agency formed when principal leads third party to believe that another individual serves as his/her agent (although principal actually made no agreement with purported agent). Agency By Ratification: agency that exists when an individual misrepresents himself as agent for another party, and principal accepts/ratifies unauthorized act. Requirements for Agency by ratification- Individual must misrepresent himself as an agent for another party, Principal’s Duties to Agent: compensation, reimbursement & Indemnification- Principal accepts/ratifies unauthorized act cooperation, safe working conditionsPrincipal has complete knowledge of all material facts regarding contract principal must ratify entirety of agent’s act Principal’s Rights and Remedies Against Agent- constructive trust, avoidance, Agent’s Rights and Remedies Against Principal indemnification-Tort and Contract Remedies Apparent Authority and Estoppel: third party reasonably believes (based on actions of principal) that agency relationship exists between -Demand for an accounting principal and another individual-Specific performanceClassification of Principal: Must be classified as either disclosed, partially disclosed, or undisclosed Termination by Operation of Law: Death (agent or principal), insanity (either),Change in law-Disclosed Principal: agent not liable, principal liable Bankrupty(either), Change in circumstances, impossibility in performance,disloyalty of agent-Partially Disclosed Principal: Agent possibly liable, principal liable-Undisclosed Principal: Agent liable, principal liable General Partnership-Partnership income is partner income, business losses qualify for tax deductionsThird Party Reasonably Believes Agent Has Authority – agent liable, principal not liable Agent of partnershipThird Party Believes Agent Mistaken About His Authority – agent not liable, principal not liableAgent’s Tortious Conduct – Principal Directly Responsible If:- Principal directs agent to commit tortious act- Principal fails to provide proper instructions, tools, or adequate instructionsAgent Misrepresentation – if agent misrepresents himself to third part, principal may be tortuously liable for agent’s misrepresentationRespondeat Superior – Principal/employer liable if employee wrongfully injures third party (not because he’s personally at fault, but because he negligently hired agent)Principal’s Liability and the Independent ContractorGeneral Rule: Individual who hires independent contractor not liable for independent contractor’s tortious actions under doctrine of “Respondeat Superior” unless contractor engages in hazardous activities1) If Agent commits crime – agent liable2) If Agent commits crime in scope of employment WITHOUT authorization of principal – principal not liable for agent’s crime3) Principal Liable For Agent’s Crime If – principal authorized agent’s criminal actTermination By Acts of Parties-Lapse of time Partnership Duties-Duty of loyalty,obedience,care-Fulfillment of purpose Partnership Rights-share in mgmt., share in profits, compensation, partnership property, inspect books, accounting-Occurrence of Specific Event-Mutual Agreement Partnership Dissolution by “operation of law”: Partner dies, Partner adjucated bankruptcy, engages in illegal activity-Revocation of Authority Partnership Dissolution by “Court Action”:1) Partner adjudicated insan 2) Impractical to continue 3) Partner incapable of fulfilling duty4) Partner disagreement -Renunciation By Agent on conducting businessRequirements for Limited Liability (of Limited Partner)-Limited partner has complied in good faith with certificate of limited partnership filing requirement-Limited partner does not participate in control of business-Limited partner’s surname is NOT part of the partnership nameLimited Liability Company (LLC) – business organization with limited liability of a corporation, yet taxed like partnership-Formed under state law- Owners of LLC (“members”) pay personal income taxes on shares they report-No limitation on number of owners permitted in LLC-Similar to limited partnership since each member has limited liability (dependent on investment)-Single Taxation-Each member can participate in managementTypes of Franchises1) “Chain-Style” Business Operation – franchisor helps franchisee establish a business (using franchisor’s


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