BUS 221 Final Exam

The U.S. Fair Labor Standards Act restricts or sets requirements for

-Child Labor -Minimum Wage -Overtime

Under federal (and most states) income tax law, to what extent is a partnership entity taxed? To what extent are the partners taxed?

-For federal income tax purposes, the profit or losses of the partnership are passed through to the individual partners -Partnership does not pay taxes on entity level. The individual partner must report his or her share of the profit or loss on his or her own personal income tax return and personally pays any resulting income tax under his/her 1040

2 kinds of Sexual Harassment

-Quid Pro Quo -Hostile work environment

What are the Remedies for employment discrimination under Title VII

-Reinstatement -Back Pay -Retroactive Promotions -Damages

Who might/could be an agent in a Principal-Agent relationship?

-an employee sales person acting for her employer -an independent contractor acting for a company -an individual who, without consideration, expressly agrees to act on behalf of another individual -someone who is authorized by contract to represent another party in negotiations, transactions and contracts

What are the main characteristics, advantages, and disadvantages of a Sole Proprietorship?

-simplest form of business organization -the owner and the are the same -greater flexibility over other forms of business organization -owner makes all decisions and can operate the enterprise without formalities DISADVANTAGES -no limits on the liability of the owner for the debts and obligations of the firm -the ability of a sole proprietor to raise capital while maintaining control, and retaining the same form, is limited chiefly to borrowing funds

XYZ Corporation is a new business. It needs more capital to run its operations.How can a Corporation raise additional capital?

1) Issue corporate bonds 2) issue shares of preferred stock or more shares of common stock 3) obtain loans from banks or pledging some of its assets 4)obtain venture capital financing or private equity capital

The U.S. Fair Labor Standards Act regulates:

1) Minimum hourly wages for non-exempt employees 2) Pay rates for time worked over 40 hours per week, for non-exempt employees 3) Child labor

What are the five duties of an Agent?

1) Performance 2) Notification 3) Loyalty 4) Obedience 5) Accounting

What is the difference between Agency Relationship and a Contractual Relationship?

Agency Relationship -fisuciary and consensual relationship between "persons" where one person acts on behalf of the other person and where the agent can form legal relationships on behalf of the principal. Contractual Relationship -relationship between two or more parties to a contract. Created on the basis of a legal act, agreeing on mutually agreed terms and conditions. Inextricably linked with contract law, defining the rights and obligations of the parties to the legal relationship

An Agents duty of loyalty to the Principal includes keeping acquired information __________

Confidential

Eve is a director of Fab Style Corporation. Without informing Fab , Eve goes into business with Gro Trend, Inc., in competition with Fab. Eve is most likely liable for breach of

Duty of Loyalty

What is Employment at Will?

Either party may terminate the employment at any time for any reason, unless a contract provides to the contrary

Are employers liable for negligence acts of an independent contractor?

Employers are liable for the negligent acts or omissions committed by their employees in the course of their employment

An agency relationship cannot be created by an oral agreement

False

Anyone who does business must create a separate business organization

False

Courts can never "pierce the veil" of a limited liability company to expose shareholders to personal liability

False

Employers cannot avoid any tax liabilities by hiring independent contractors instead of employees

False

If an employers employment manual says that employees will only be fired for cause, this is an employment-at-will

False

In a LIMITED partnership, EVERY partner has full responsibility for the partnership and for all its debts

False

Not all directors have a right to access a corporations books and records, facilities, and premises

False

The Fourth Amendment of the U.S. Constitution prohibits private employers from conducting drug tests of employees and applications

False

The executive officers represent the ultimate authority in every corporation

False

title VII of the Civil Rights Act of 1964 does not apply to State and Local government agencies

False

The doctrine of Employment at will governs GOVERNMENT employers

False -only applies to private employers

Teresa buys a franchise from Urgent Medical Clinics, LLC. If their agreement is like most franchise agreements, it will specify that Urgent Medical can terminate the franchise

For cause only

What is the difference between an Employee and an independent contractor?

For the employee the company withholds income tax, Social Security, and Medicare from wages paid. For the independent contractor, the company does not withhold taxes, and employment and labor laws also do not apply to the independent contractor

I.R.A.C

Issue, Rule, Apply, Conculsion

Can an employer fire an employee for "whistleblowing"

NO -Retaliation against a whistleblower would be against public policy and against many specific statutes

What are the two main kinds of securities that a corporation can issue to raise capital?

Stocks and Bonds

Who has overall authority and responsibility to govern a corporation?

The Board of Directors

Mr. Smith is a director and offer of ABC Pizza Corporation. Mr. Smith selects an ad campaign that consumers find offensive -- a marketing decisions that results in a dramatic decrease in profits for the firm and its shareholders. The shareholders accuse Mr. Smith of breaching his fiduciary duty to the corporation by failing to exercise due care. What is Donatello's best defense against this accusation.

The Business Judgment Rule

A court might treat an Employee Manual as an implied employment contract

True

A court will pierce the corporate veil of a corporation when the corporate privilege is abused for personal benefit

True

A franchisee ordinarily pays a fee for a franchise license (the privilege of being granted a franchise)

True

A principal is NOT normally liable for the crimes of an agent committed within the scope of the agency or employment

True

A principal petitions for bankruptcy and is declared bankrupt by the bankruptcy court. Usually, this event automatically terminates the agency relationship between the principal and its agents

True

A sole proprietorship offers more flexibility than does a partnership or a corporation

True

An advantage of a Limited Liability Partnership is that partners can avoid personal liability for any obligation of the partnership

True

An employer usually has the right to monitor employees communications on EMPLOYER-PROVIDED devises and systems for email, phone, voicemail, computer data, and electronic communications

True

Both case law and statutory law protect franchisees when a franchisor wrongfully (unfairly or arbitrarily) terminates the franchise

True

Case law and statutes protect franchisees when a franchisor wrongfully (unfairly or arbitrarily terminates the franchise)

True

Directors appoint the chief officers

True

In a corporation, the shareholders must approve mergers and similar corporate reorganizations

True

In a general partnership, the partners have unlimited personal liability for the obligations and liabilities of the partnership and of the other partners

True

In a general partnership, the partners, by their right vote, share control over the partnership business

True

In a general partnership, the partners, by voting, share the control over the partnership business

True

In discrimination cases brought under Title VII, intention discrimination is called "disparate treatment" discrimination. Unintentional discrimination is called "disparate impact" discrimination.

True

Mary is an employee of XYZ Corporation. She is supervised by and reports to Peter, the Chief Financial Officer of the corporation. She is convicted of conspiring to violate a federal price-fixing law. In such a case, Peter could also potentially be personally prosecuted for Marys crime because he was the officer supervising her.

True

Most franchise agreements contain a provision that specifies that the franchise may be terminated only for cause

True

Shareholders elect the directors

True

The Family and Medical Leave Act (FMLA) allows employees to take time off work for family or medical reasons

True

The doctrine of Employment of Will means that the employer may terminate an employee at any time for any legal reason

True

The equal employment opportunity commission is a federal agency that, among other things, monitors employers compliance with Title VII

True

The officers hire/fire most other employees

True

The state can dissolve a corporation for failing to pay taxes

True

Title VII of the Civil Rights Act of 1964 prohibits religious discrimination in employment. In addition, it requires that employers must reasonably accommodate an employees sincerely held religious practices

True

Under Title VII of the Civil Rights Act, most private firms are prohibited from discriminating in employment matters on the basis of race, sex, color, religion and national origin

True

Under the law of agency, notice to the agent is notice to the principal

True

Unless a limited liability company indicates otherwise, the Internal Revenue Service automatically taxes it as a partnership

True

When a partner disassociates (leaves the partnership) in violation of the terms of the partnership agreement, the disassociation is wrongful

True

Workers Compensation covers your medical expenses if you are injured on the job or in the course of employment

True

What is a Fiduciary relationship?

Where one person places complete confidence in another in regard to a particular transaction or one's general affairs or business.

Lighting Corporation and Mind, Inc., two game creators, wish to combine their capabilities to make and market Nano, a special limited-edition game. The appropriate legal entity for this project is most likely

a joint venue

Hudson and Ilsa want to market a new line of kayaks and related gear under the brand name Journeys as a corporation-- Journeys Inc. To avoid income taxes at the corporate level, they should form

an S corporation

Sybil agrees with Tyrone and other professional athletes to sign contracts with promoters and others on the athletes' behalf. Sybil is..

an agent

What is the Principal-Agent Relationship?

an arrangement in which one entity legally appoints another to act on its behalf. The agent acts on behalf of the principal and should not have a conflict of interest carrying out the act

Reynaldo is a delivery driver for Southeast Asian Noodle Company. Reynaldo follows detailed instructions of the company in carrying out his work. Reynaldo is..

an employee

What is Respondeat Superior

an employee's responsibility for their employees actions. Includes duty owned to the patient, breached of duty, damages, respondeat superior.

Nell is considering forms of business organizations for Optic Center, a medical eye clinic. An advantage of a limited liability partnership is that, depending on the applicable state statute, partners can avoid personal liability for

any partnership obligation

Investment Holdings Corporation hires Jeri, a business appraiser, to locate investment possibilities for Investment Holdings. Jeri learns of a salsa and hot sauce manufacturing company available for a reasonable price, but neglects to tell Investment Holdings. Most likely, Jeri

breached an agents fiduciary duties to the principal

Can a corporation be held criminally liable for crimes committed by its agents or employees?

in many cases, yes

Mirena serves in a representative capacity for Netanya. Orla is injured through Mirena's negligence. Under the doctrine of RESPONDEAT SUPERIOR, Netanya may be liable to Orla if Mirenas conduct occurred

in the course and scope of Mirenas employment

Chet is a partner in Diligent Accounting Service. Chet can inspect Diligents books and records

in their entirely

Agency

legal relationship

What is constructive discharge

occurs when an employee resigns as a result of the employer creating a hostile work environment

Jeri and Knute are members of the Lighthouse Tours LLC, a limited liability company. With respect to Lighthouse Tours Liabilities, as members, Jeri and Knute are shielded from

personal liability

Rosalee is a general partner in Silver Dragon, a partnership consisting of the owners of a Chinese and American restaurant. Silver Dragon incurs debt for new dining tables and chairs. With respect to this debt, Rosalee is

personally liable to the full extent

Gina is a director on the board of Home Furnishing Inc. As a director, she may NOT

put her personal interests before the welfare of the firm

Title VII prohibits discrimination in employment on the basis of:

race, sex, color, religion, and national origin

Quid Pro Quo

something given in exchange or return for something else

Dana is a member of Earthground Coffee, LLC, a limited liability company. Dana is liable for Earthground"s debts

to the extent of her investment in the firm

A familiar example of an agent is a corporate officer

true