88 Cards in this Set
| Front | Back |
|---|---|
|
Agency
|
"the law of"
Covers relationship between people and intangible corporations, LLC, partnerships
|
|
Principle/Agent Relationship
|
principle=corporation
agent=employees
|
|
3 principles of Principle/Agent relationship
|
-power to create contracts
-designates to has liability to create contracts
-creates vicarious liability
-negligent FedEx guy get sued and victims also sue FedEx
|
|
Sole proprietorship
unlimited liability
|
1 owner: business & person are the same
-personal tax=proprietor tax
-tax return advantage-
-usually evolve into a partnership
|
|
Principles of Master/servant relationship
|
- no power to create contracts
- Creates vicarious liability through servant
-ex: blacksmith's apprentice
|
|
Vicarious Liability- based on "respondent superior" Latin
|
Superior may have to pay damages of employees negligence
|
|
On the job vs. Frolic
|
-On the job: company has to pay because employee was on the job
-Frolic: supposed to be on the job, but they're doing something for themselves instead
-crain driver: on the way back took crane to another streets to show off to gf; company was NOT liable
|
|
Apparent authority
|
If it's apparent to outsiders that employee has the authority to do something, company is liable
EX: says deposited $500 in bank but doesnt show up, bank says teller wasnt worker. Bank is liable because he was behind the teller window
|
|
On the job vs frolic ex: -bartender hits customers
-bouncer breaks customers arm
|
-bartender frolic: not supposed to hit customers
-bouncer, company is liable
|
|
On the job vs frolic
-forest ranger dead because of carbon monoxide
|
-company is liable because he was in that area
|
|
Holding out:
|
-if you hold yourself to be something, then you are accepting the liability that goes with
-Put part owner on bus card even though not owner. Customer buys from you, and injured, you say youre not owner. But you're still liable
|
|
Partnership: more than 1 person
-unlimited liability
|
-split everything
-written contract not required
-can specify gains/losses in contract
-% of profit taxed like sol proprietorship
-Pass through for taxes: partnership doesnt pay, individual partner pays
|
|
Corporation- regular/ C corp
limited liability
|
-not pass through/ double taxed: taxed on income plus dividends
-corp is separate from person
-formed by going to the state & be a registered agent(person for contact)
-must have a tax payer ID (similar to Social security)
|
|
Pizza deliver hits school bus partnership vs corp
|
partnership: can take partners personal assets
corp: limited liability; only take corporate assets
|
|
Limited partnership
ex:
|
-general partner has unlimited liability
-limited partner: limited liability to what you invest, no personal assets
-must have no part of management
-pass thru tax, w limited liability
EX: gas, drilling
|
|
S Corporation: Hybrid
|
-formed the same as C corp
-IRS must agree to pass thru tax like partnership
-IRS force a tradeoff for less revenue
-less than 100 shareholders
-not public exchange
|
|
Limited Liability Company
|
-originated in WY
- all investors have limited liability like a corp
-can be taxed as corp or partnership (pass thru or not)
-any1 can manage or be employee
-no limit to shareholders/stockholders
-easy to raise capital
-cant be publicly traded
|
|
What is the current securities law about going public IPO
|
1933 securities act, 1st sec act
initial public offering
|
|
What does the issuer have to do before going public?
|
register with SEC
|
|
What is full disclosure
|
-tell EVERYTHING about company
- cant omit anything
|
|
What is the process of Prospectus
|
1st draft then SEC has to approve
|
|
Tombstone ad
underwriters
|
-advertise to sell stocks at a future date, no sales
-underwriters: securities firm plan to sell stock at a future date
|
|
What is the post effective period: stocks
|
when the prospectus is approved, can sell securities
|
|
Sanctions for not registering company with SEC before selling stocks
|
criminal: jail
injunction: stop selling
civil liability: individual against individual, cash
|
|
SEC in/tangible?
|
-intangible
|
|
Intro: Securites & Exchange Commission fed vs state
|
-1934 after great depression
-federal regulation
-state can also regulate so both must be satisfied
|
|
State Blue Sky Laws
|
-State securities law of 50 states, protect public from worthless stocks like piece of sky
- Blue sky reporter:
|
|
blue sky reporter
|
has laws of each states regulation
|
|
Commodities Future Trading Commission CFTC
|
future commodity
-usually tangible
|
|
security def: investment contract
|
anything that can be considered investment contract: some1 invest in business where other pp do the work but investors share income
|
|
Examples of investment contracts
|
-bonds
-stocks
|
|
Howey Case
|
>Orange grower in Florida who needs investors
>Sold rows of orange trees to investors
-give me $ and ill do all the work
>SEC ruled Howey was selling Investment Contracts
-soliciting is illegal
|
|
Control
General partner
limited parter
Corp
|
-Gen Partner: =
-Limited partner: creator=promoter so total control
-Corporations: shareholders elect board of directors
|
|
Continuity of partnership
|
if 1 partner dies/ withdraws, cannot continue
|
|
Continuity (S/C) LLC
|
continuous because its a separate entity
|
|
Buy Sell Agreement
|
provides for one or more of the partners to buy out the other should one partner choose to leave
|
|
when was SEC created
|
1934
|
|
Does the 1933 act have to do with "value" or "full disclosure"?
|
Full disclosure
>Gov does not have responsibility to protect investor from bad investment
|
|
1934 Securities Act
"Being public"
|
-trading shares of owned investments
|
|
Insider trading
|
Board, officer, employees trade stocks w/out public knowing about info
-Qwest guy
|
|
When does the company (stock) makes money?
|
from selling IPO first time
|
|
10Q
|
company's Quarterly report to SEC, public knows
|
|
10K
|
4 quarter final year end :Annual report to SEC
|
|
8K
|
report file to SEC when good/bad BIG news happen
Ex: found oil!
|
|
Tipper:
Tippe:
|
tipper gives info
tippe receives info
|
|
T/F Tipee is just as guilty as tipper
|
true (martha stewart in trouble)
|
|
Is it better for some1 in company to buy/ sell stocks and why?
|
Buying, thinking it will go up, using more personal money
|
|
4th branch of government
|
administrative agencies, bureaucrats
-90% of pp employed by gov
|
|
How many functions administrative agencies
|
6
|
|
Examples of administrative agencies
|
SEC
FBI
IRS
DEA
FAA
|
|
Why are administrative agencies a "prouct of necessity"?
|
Each branch delegates a comission to make rules because the gov is not an expert in the field & cant prosecute
-ex: air traffic controls system FAA
|
|
How to reduce # of administrative cases in court 3
|
1. Standing: must have direct harm to plaintiff: security at DIA--hunter with knife= no standing
2. Exhaustion of remedies: physically, mentally, financially exhausted: 4 levels of appeal in IRS cause exhaustion
3. Fact finding: who has the most facts win
|
|
6 functions of Administrative Agencies
|
1. Advising: what is SEC advises to legally sell shares
2. Supervising: SEC perspectus check
3. Rule-making(legislative): delegate rule making agencies w expertise
4. Investigate (executive): if some1 might have broken the rule
5. Prosecute (executive): imprison
6. Adjudicating (judi…
|
|
Problems with administrative agencies
|
-violates separation of power doctrine in constitution
|
|
Fix problem with Administrative agencies, separation of power doctrine
|
-checks & balances prevents 1 branch from becoming too powerful
-chemistry between pp lead to power abuse
-have all 3 branches
|
|
3 judicial standards for protection against administrative agencies
|
1. Valid standards: must be established w validity
2. Interpret: sufficiently describe, not vague
3. Within boundaries: work w/in standards
|
|
"VOid for vagueness"
|
Administrative agency is void because it was vaguely established
|
|
What can administrative agencies not do? 3
|
1. capricious: gov is intentionally harming pp
2. unreasonable: might be logical but cost > than benefit
- Virginia: mudflaps on bus
3. arbitrary: unrelated, illogical
-Virginia: 3 point seat belt on bus is unrelated to NY
|
|
Why you usually lose against administrative agency? FACT FINDING
|
who has more facts win
-substantial evidence: only 52% for IRS to win (AGENCY)
-Manifest weight: to overturn AGENCY if you get 85% of evidence
*MAKES it easier for agency to win
|
|
Administrative agency wins __% of the time
|
87% of time unfair
|
|
Commerce clause
|
-institution states that congress has power to regulate commerce among the states (interstate commerce)
-state can also regulate commerce
|
|
Regulations of business: fed and state
-Areas of regulation?
-Restriction
|
-federal and state interactions during regulation
-what gov is restricted to do
|
|
Intra State
|
Only inside state lines (technically doesnt exist)
-fed cant regulate you (farm) exist in theory not reality
|
|
Interstate
|
"among the states"
-congress regulates commerce across lines
|
|
Wickard(Department of agriculture) vs Filburn case?
|
-Too much grain cause price to decrease
-DOA says cant produce grain on 1-4 of lot
-Farmer filburn said that he's intrastate (grains used for his animals)
-Gov says didnt buy grain therefore affect supply
|
|
Wickard vs Filburn
Filburn argues his grain was "diver minimus" what did gov says?
|
-Filburn says his lot is small fraction of the total
-The gov says if every1 does it, then there is a substantial effect
|
|
Police powers
|
state power to regulate within the state
|
|
Southern Pacific Railroad vs Arizona
|
-AZ passed law shortening trains passing through to minimize time to clear intersection
-Cost SPR more money
- Length requirement varies from state to state
- Became federally exclusive even if gov doesnt regulate train
|
|
What is police power
|
state power to regulate business w/in their state
|
|
4 categories of police power, state power
|
1. heatlh
2. safety
3. Morals: gambling
4. general welfare
|
|
Federally exclusive
|
-certain businesses: only the federal government can regulate
-areas requiring uniformity
-aviation
-railroad
|
|
Federal preempts the field of commerce
EX
|
-excludes state from regulation
ex: NLRB: exclusive agency to hold elections for unions
-state cant hold elections for unitions
|
|
Federal doesnt preempt the field what it means?
ex: SEC
|
-Federal doesnt have exclusive/ uniform regulation but still regulates
-SEC regulates the sale of securities but are not exclusive
-states can pass securities law(Blue sky law)
|
|
State Law is unconstitutional if 3+3:
|
1. Undue burden: Georgia photography requires a license out of state, not constitutional
2. Discriminatory
3. Irreconcilable conflict: going in different directions clean air is constitutional
4. arbitary, unreasonable, capricious
|
|
Gov: Clean air act: regulate car exhaust
California passes a stricter law because its more polluted
Constitutional or not?
|
Constitutional beause its going in the same direction
|
|
Olin Mills travel to other states to take pictures: Georgia photography
|
GA passed a law saying out of state photographers had to buy a license
-That is an undue buden on interstate commerce so it is unconstitutional
|
|
If there is no federal law to preempt/not preempt the field then
|
the police power regulates the state
|
|
How many ares of government regulation of business are there, dual regulation?
|
5 areas
3 dual regulation
|
|
Areas of Government regulation of business 5, 3 dual
|
2. Dual regulation
-fed law preempts the field
+fed labor unions
-fed law doesnt preempt
+ SEC securities
-No federal law
+ police power
3.Exclusively state (only exists in theory)
|
|
Income= no matter where its derived, taxed by state of resident
-If generate income in CA but CO resident, CA has nexus over income so tax as non resident income
CA 4% CO 5%=for CO resident
CA 5% CO 4%=
|
CA 4% CO 5%= 1% for CO resident
CA 5% CO 4%=0 for CO resident
|
|
Nexus
|
-sufficent contact between gov and taxpayer
-gov has to have nexus w taxpayer
- the US gov has nexus over any US citizens to tax income
|
|
Situs
|
Nexus for real estate/land
-state has situs over land in its border and can tax
|
|
apportionment
|
-You only pay income tax proportion in your state/nexus
-makes sure no1 gets double taxed
|
|
Northwest Airlines apportionment
|
-made $100 mil of taxable income
-Minnesota has nexus over NWA tax 4%
-Other states wanted to tax full income too= over 100%
-each state should only be able to tax the portion of business done in each state
-paid all states an average tax rate
|
|
Freight from Wyoming through CO tax road?? This is example of ___________
|
-Interstate commerce can be requested to pay fair share
- Cant assess a direct tax like the Georgia Photography case
-apportionment
|
|
Use tax (out of state, mail)
|
-tax on the use of product/property
- like real estate tax
- there's use tax on anything tangible
|
|
Sales tax
|
Use tax collected at point of sale
|
|
who can collect use tax?
|
-any governent with nexus can collect use tax
-city<county<state nexus
|
BUS 260:Exam 2