Unit 4

Diamond & Gold LLCcHires Elle to buy gems and precious metals from various source on its behalf. In this relationship, diamonds is

A principal

The members of an LLC can decide how to operate the various aspects of the business by forming

an operating agreement

Roz, a director of Soy Inc., is specially trained in petroleum trading. Soy's board approves several deals in which the company pays too much for soybeans. Roz approves all the deals without first reviewing them. Roz is most likely liable for breach of

duty of care

A rule requiring that an agent's authority be in writing if the contract to be made on behalf of the principal must be in writing.

equal dignity rule

Romero employs Supply Procurement Service as an agent under a written agreement that describes the rights and duties of both parties. This is

express authority

Orin is a corporate officer for Pacific Trade Inc. In this capacity, Orin

manages corporate day-to-day operations

Avery wants to go into business as Boom! to make and market fireworks. When deciding which form of business organization would be most appropriate, Avery would normally take into account all of the following EXCEPT

the forms of competitors' business organizations

Dan is a shareholder of energy renew Inc. when the directors failed to undertake an action to re-dress a wrong suffered by the firm Dan files a suit on its behalf. Dan suit is.

A shareholders derivative suit

Dissolution of a partnership can be brought about by A. The acts of the partners. B. Operation of law. C. Judicial decree. D. All of these choices.

All of these choices

Global enterprises Inc., competes in many products, service, and geographic markets. Global's board consists of a large number of directors. The firm faces myriad complex business issue to avoid is government from becoming unwieldy, the company can delegate some of it's functions to.

An executive committee

When the principal, by either words or actions, causes a third-party to reasonably believe that an agent has authority to act, even though the agent has no expressed or implied authority, this is considered

Apparent authority

For the sole proprietor business profits are reported

As personal income

A power of attorney can be

Both a and B special and general

Compared to a partnership, a sole proprietorship allows more

Flexibility

Penny create an exclusive agency, by granting Andrew, an exclusive territory within which Andrew may sell penny's organic skin care products. If penny starts to sell, their products herself within Andrews territory - or permits another agent to do so - penny

Has failed to cooperate with the agent

If the principal negotiate the contract, but it's called out of town the day it is to be signed in Orly, authorizes an assistant to act as an agent to sign the contract, the oral authorization

Is sufficient

By definition, independent contractors are

Not employees, and employees have no control over the details of their physical performance.

Gil is an officer for HVAC Corporation. Due to Gil's choice of a certain supplier, HVAC's costs are somewhat higher than they might have been if a different supplier had been chosen. Gil is most likely liable for breach of

Nothing

A major advantage of the sole proprietorship is that the proprietor

Owns the entire business

Contracts entered into when the business is not yet formed is called

Pre-incorporation contracts

Al medical, inc., is a private for-profit corporation that is owned by six shareholders, who are not members of the same family, but are personally known to one another. They also serve as the directors and officers, to prevent a majority shareholder from dominating the firm, the corporation may

Require more than a majority of directors, approve any board action

The principal must indemnify the Asian for the value of benefits. The Agent conference on the principal in the amount of indemnification is.

Specified in the agency contract

When the owner of a sole proprietorship dies, what happens?

The business is dissolved.

Guy is a Director of healthcare corporation. Kya tends to use his best judgment and guiding corporate management and miss a few honest mistake. His best defense against liability for these mistakes is

The business judgment rule

Burger & brew inc. prepare its stickers of incorporation. The articles are likely to include

The corporations name the number of shares a corporation is authorized to issue. The corporations registered agent, so all of the choices.

A key advantage of the LLC for members is

The members are not personally liable

Olin is a partner in precision plumbing. When the partners decide to dissolve the form, Olin collects and distributes the . This results in

The termination of the firms legal existence.

What is required for decisions, such as to admit a new partner, or engage in a new business

Unanimous consent

Kit hires Lanie to manage Kit's Cattle Ranch. Lanie agrees to act on Kit's behalf, subject to Kit's control, and Kit trusts Lanie to so act. Their relationship is a. an employee and an agent. b. none of the choices. c. an employer and an independent contractor. d. a principal and an agent.

a principal and an agent

Rosario is a chef and caterer who hires out on a per-project basis to companies with on-location work sites, as well as to hosts of banquets, corporate meetings, concerts, weddings, and other events. In this capacity, Rosario is

an independent contractor

Paper & Scissors Inc, wants to incorporate. The primary document needed to incorporate a business is.

articles of incorporation

Integrated Devices, Inc., is a private, for profit corporation that is owned by seven shareholders, who are members of the same family. Integrated is.

close corporation

The termination of a partnership is referred to as

dissolution

Oil Industries Inc. is a private, for-profit corporation that is owned by five shareholders who are members of the same family. Po, the majority shareholder, misappropriates company funds. The shareholders whose interests are injured by Po's misconduct should

have their shares appraised and be paid the fair market value for them.

How can an LLC be managed?

member-managed or manager-managed

Erin, a shareholder of Finance Inc., demands the right to inspect corporate records to determine whether management has engaged in self-dealing that impacts the company. The firm refuses the request. On Erin's challenge, a court is most likely to hold that her request constitutes

proper purpose

Ned and Olga are shareholders of Pizza Pies Inc. Ned's written authorization to Olga to vote Ned's shares at a shareholders' meeting is

proxy

Welding Corporation makes a good faith attempt to incorporate but there is a defect in its incorporation. Welding undertakes business as a corporation. In this circumstance, the firm's existence may be challenged by

state

Bread Company hires Craig to sell the company's products in a certain area. Bread agrees to pay Craig a salary, plus commission, for a trial period. They also agree that he can sell using any methods and during any hours that seem appropriate. The key factor in whether Craig is Bread's employee is

the degree of the employer's control over the details of the work.