Business Law 2 Final Study Guide

FMLA (Family and Medical Leave Act)

-Grants 12 weeks unpaid job protected leave to men or women after birth of child, adoption, or illness in immediate family -Only affects businesses with 50+ employees

Functions of Law

1. Keep the peace 2. Shape moral standards 3. Promote social justice 4. Maintain the status quo 5. Facilitate orderly change 6. Facilitate planning 7. Provide a basis for compromise 8. Maximize individual freedom

Major Forms of Business Organizations

1. Sole Proprietorship 2. General Partnership 3. Limited Partnership 4. Corporation 5. Limited Liability Corporation 6. Limited Liability Partnership

Debts are satisfied in the following order:

1. creditors (except partners who are creditors) 2. creditor partners 3. capital contributions 4. profits

Four theories of social responsibility of a business

1. maximize profits 2. moral minimum 3. stakeholder interest 4. corporate citizenship

Liability of an LLC

A LLC is liable for any loss or injury caused to anyone as a result of a wrongful act by a member, manager, agent, or employee

U.S. Citizenship and Immigration Services

A federal agency empowered to enforce U.S. immigration laws

Reasonable Professional Standard

A legal standard that defendants who have particular expertise or competence are measured against

Limited Partnership (LP)

A partnership consisting of one or more general partners and one or more limited partners.

Entrepreneur

A person who organizes, manages, and takes on the risks of a business, can be run by self or with others

Corporate Citizenship

A theory that states that a business has a responsibility to do good

maximizing profits

A theory that states that a corporate owes a duty to take actions that maximize profits for shareholders

Stakeholder Interest

A theory that states that a corporation must consider the effects its actions has on people other than its shareholders

How is LLC taxed?

Any unincorporated business with more than one owner is automatically taxed as partnership unless it fits one of the exceptions.

The ________ is responsible for making policy decisions concerning the operation of a corporation.

Board of Directors

Child Labor Laws

Children under 14 cannot work unless its newspaper deliveries, children ages 14-15 work limited hours and children 16-17 may work unlimited hours in nonhazardous job, persons ages 18 and above can work anywhere

Which of the following statements is true about corporations?

Corporations can hold title to property.

Duties of Members of an LLC

Duty of loyalty and care

A right to sue letter is issued by the EEOC if the ________.

EEOC decides not to bring suit against the employer

Liability of General Partners

General partners have unlimited liability for debts and obligations of the partnership, they have personable liability, and joint and serveal liability

A foreign national is permitted to work in a skilled specialty occupation in the United States with a ________.

H-1B visa

Federal Unemployment Tax Act (FUTA)

Law that requires employers to pay unemployment taxes to the federal government

Liability of outgoing partners

Liable for debts and obligations incurred at time of dissolution Not liable for new debts and obligations incurred after dissolution

Taxation of Sole Proprietorship

No taxes at business level Earnings and losses are reported on personal income tax filing File tax returns and pay taxes to state and federal governments (Form 1040)

Vesting

Process by which a retirement benefit becomes nonforfeitable.

collective bargaining

Process by which a union representing a group of workers negotiates with management for a contract

________ corporations have many shareholders, whereas, ________ corporations only have a few shareholders who are often personally involved with the company.

Publicly held; closely held

Worker Compensation

Regardless of fault, if injured at work the employee will collect benefits

Which of the following statements accurately captures the taxation of sole proprietorship?

Taxes are reported on the sole proprietor's personal income taxes.

U.S. Department of Labor

The agency that deals with complaints filed by employees who feel that their rights protected by fair labor laws have been violated

Certificate of Limited Partnership

The basic document filed with a designated state official by which a limited partnership is formed.

Employee Retirement Income Security Act (ERISA)

The federal act that established protection of pension plans and the PBGC

Picketing

The gathering of striking workers at a business site as a sign of protest

unlimited personal liability of a sole proprietor

The personal liability of a sole proprietor for all the debts and obligations of a sole proprietorship.

Winding Up

The second of two stages in the termination of a partnership or corporation, in which the firm's assets are collected, liquidated, and distributed, and liabilities are discharged.

Notice of Dissolution

Third parties, who have: -dealt with the partnership, must be given actual notice of dissolution. -not dealt with the partnership but have knowledge of it, must be given actual or constructive notice. -no knowledge of the partnership, do not have to be given notice.

Partnership law is codified in the ________.

Uniform Partnership Act

Right to share in profits

Unless otherwise agreed, the UPA mandates that a general partner has the right to an equal share in the partnership's profits and losses

Form I-9 (Employment Eligibility Verification)

Used to verify the identity and employment authorization of individuals hired in the United States. Includes both citizens and non citizens.

Tort

Wrongful act that results in injury to one person by another

A group that wants to unionize must define _____?

a bargaining unit

Breach of the Duty of Care

a failure to exercise care or to act as a reasonable person would act

To form a sole proprietorship, ________ is required.

a local business license

Partnership for a term

a partnership created for a fixed duration

Partnership at will

a partnership created with no fixed duration

Unintentional Torts (Negligence)

a person is liable for harm that is the foreseeable consequence of his or her actions Each person owes a duty of care Duty of Care must be applied for it to be intentional

wrongful dissolution

a situation in which a partner withdraws from a partnership without having the right to do so at that time

moral minmum

a theory that states that a corporations duty is to make a profit while avoiding the harm of others

Reasonable Person Standard

amount of care that a reasonable person would provide to someone else under all the circumstances

Section 406 of the Sarbanes-Oxley Act

an act that requires a public company to disclose whether it has a code of ethics

Continuation Agreement

an agreement among the surviving or remaining general partners of a partnership to continue a partnership after its dissolution

Regulatory Statutes

another word for administrative law

Intentional Torts

assault, battery, false imprisonment, shoplifting

An employer ________.

cannot legally interfere with employees' rights to join unions

Which of the following sequences of events MOST accurately portrays a real-life scenario?

collective bargaining → 60-day cooling off period→ picketing → strike

Tort Damages

compensatory damages and punitive damages

Self-dealingis considered part of which general partnership duty?

duty of loyalty

Duties of General Partners

duty of loyalty, duty of care, duty to inform, duty of obedience

Which of the following are lawful?

employer lockout

An employer may be exempt from paying federal minimum wage under any of the following circumstances EXCEPT ________.

for hours spent waiting during the workday (for example, machinery breaks down at a factory)

The voluntary association of two or more persons for carrying on a business as co-owners, for profit, is called a ________.

general partnership

Which form of business organization has been recognized since ancient times?

general partnership

Although union employees have the right to strike in a labor conflict, the employer has the right to ________ leading to a potential lose-lose resolution as the striking laborers ________ and the employer has a less experienced workforce.

hire temporary labor, do not get paid

Defective Formation

if no certificate is filed or if the one filed does not substantially meet the statutory requirements, the formation is defective and the limited liability of the limited partners is jeopardized

General Partners

invest capital, manage the business, and are personally liable for partnership debts

Occupational Safety and Health Act

is a federal law that establishes and promotes workplace safety standards for businesses

How to qualify as a general partnership

it must be... 1. two or more people 2. for business purposes 3. as co-owners 4. for profit a person cannot be forced

Administrative Law

law established by the government to regulate businesses ad professionals

Moral theory of Law

law should be based on morality and ethics

Consolidated Omnibus Budget Reconciliation Act (COBRA)

law that allows employees and their beneficiaries to continue their group health insurance even after an employees employment has ended

The limited liability of limited partners includes ________.

liability up to the amount of their contributions

Duty of loyalty as it pertains to a general partnership includes which of the following?

not usurping a partnership opportunity

The business partners in a general partnership have all of the following rights EXCEPT the right ________.

of return of loans and capital regardless of debt to creditors

Tortfeasor

one who commits a tort

Limited Partners

partners in a limited partnership who invest capital but do not participate in management and are not personally liable for partnership debts beyond their capital contributions

A limited partnership differs from a general partnership in that it includes ________.

partners who invest capital but do not participate in management

Incoming partner's liability for pre-existing debts

personally liable

The amount of money that a worker's compensation claimant can recover is ________.

preset as established by statute or regulations

General Partnership

recognized since ancient times. two or more persons. partners are personally liable for the debts and obligations of the partnership.

Federal Insurance Contributions Act (FICA)

requires employees to participated in in contributions to social security

All general partners_________of the general partnership business.

right to participate in the management

Law

rules that regulate individuals, businesses, and organizations in society

Self-Employment Contributions Act

self employed individuals must pay social security contributions too

One advantage of a limited liability partnership is that, unlike a corporation, the owner(s) of the limited liability partnership are considered ________.

separate entities from the partnership

LLC (Limited Liability Company)

separate legal entity, distinct from its members

Sole Proprietorship

simplest form of business and has only one owner

The simplest form of a business organization is the ________.

sole proprietorship

Dissolution

the breaking up into parts; termination of a legal bond or contract

The benefits of operating a business as a limited liability corporation include all of the following EXCEPT ________.

the business cannot be sued by another party

Flow-Through Taxation

the income and losses of partnership flow onto and have to be reported on the individual partners' personal income tax returns

Social Responsibility

the obligation of a business to contribute to society

Duty of Care

the obligation people owe each other not to cause any unreasonable harm or risk of harm

Child Labor

the use of children in industry or business, especially when illegal or considered inhumane

Which of the following statements is NOT true about entrepreneurs?

their endeavors start out as a sole proprietorship

How is a general partnership taxed?

they do not pay federal income taxes, income and losses "flow" onto and report on the individual income tax returns

strike

to refuse to work in order to force an employer to meet certain demands

A(n) ________ shop agreement states that employees must join the union within a certain amount of time; a(n) ________ shop agreement specifies dues to be paid.

union; agency

A sole proprietor has ________ liability.

unlimited personal

cooling-off period

when workers in a critical industry return to their jobs while the union and management continue negotiations (60 days)

General Partnership Agreement, Articles of General Partnership, Articles of Partnership

written agreement