Busy. Please wait.

show password
Forgot Password?

Don't have an account?  Sign up 

Username is available taken
show password


Make sure to remember your password. If you forget it there is no way for StudyStack to send you a reset link. You would need to create a new account.
We do not share your email address with others. It is only used to allow you to reset your password. For details read our Privacy Policy and Terms of Service.

Already a StudyStack user? Log In

Reset Password
Enter the associated with your account, and we'll email you a link to reset your password.

Remove Ads
Don't know
remaining cards
To flip the current card, click it or press the Spacebar key.  To move the current card to one of the three colored boxes, click on the box.  You may also press the UP ARROW key to move the card to the "Know" box, the DOWN ARROW key to move the card to the "Don't know" box, or the RIGHT ARROW key to move the card to the Remaining box.  You may also click on the card displayed in any of the three boxes to bring that card back to the center.

Pass complete!

"Know" box contains:
Time elapsed:
restart all cards

Embed Code - If you would like this activity on your web page, copy the script below and paste it into your web page.

  Normal Size     Small Size show me how

Business Law Exam 2

5 rules of Negotiable Instruments Unconditonal Promise to pay "to order" or "to bearer"; Pay on Demand, or at a Specific Time; Sum Certain; Must be in Writing; Must be Signed
Holder in Due Course (4 Rules) Holds a Negotiable Instrument; Give value to the previous holder; performed in good faith; no Knowledge
Real Defenses vs HIDC (5) Bankruptcy; Forgery; Court Ordered Insanity/Minor; Material Alteration; Fraud in the Execution
Personal Defenses (5) Will not beat HIDC: Breach of Contract; Consideration Failed; Wrongful Completion; Fraud in the Inducement; Duplicate Payment
Priority of Payments: Cash> Negotiable Instrument HIDS> Negotiable Instrument non-HIDC> non-Negotiable Instrument>Verbal Promise
Endorsements (5) Blank; Restrictive; Special; Qualified; Combination
Transfer Warranties (5) No Forgeries; no material alterations; no bankruptcy; no claims or defenses (no breach of contract); entitled to enforce
Methods to claim assets for debts (8) law suit; attachment; garnishment; lien (attachment with super priority); surety agreement (Primary, can be verbal); Guaranty (Secondary, Statute of Frauds); mortgage on real property; UCC Security Agreement (attaches movable to debt)
Insurance measures to collect money UCC-9; movable; mortgage; surety; guaranty
Types of Bankruptcy Chapters, 7, 9, 11, 12, 13
Chapter 7 Bankruptcy liquidating
Chapter 9 Bankruptcy municipalities
Chapter 11 Bankruptcy reorganization
Chapter 12 Bankruptcy farmers
Chapter 13 Bankruptcy individual
Assets Immune to Bankrupcty Health Aids; retirement Accounts; Life Insurance; Alimony
Debts immune to bankruptcy back taxes; student loans; intentional tort; alimony/child support; borrows against retirement account; cash advances; DWI debt; government fines and penalties
Sole proprietorship formation, management, liability, legal position, taxation, duration, unilateral transfer At will, autonomous, unlimited (buy insurance), one entity, single tax, termination at will, buy/sell just the assets
Corporation formation, management, liability, legal position, taxation, duration, unilateral transfer File with Secretary of State (Articles of incorporation and register in other jurisdictions) board of directors elected by shareholders, limited to Corporate assets, separate entity from shareholders, double tax (on corp and on dividends), perpetual, full
Partnership formation, management, liability, legal position, taxation, duration, unilateral transfer At will and by actions, shared management, unlimited (buy insurance), some states say separate entity, single tax that flows to partners (business and partners file returns), by agreement or will or withdrawal, can't transfer rights just assign value
LLC formation, management, liability, legal position, taxation, duration, unilateral transfer File with Secretary of State, shared management (vary by agreement), limited to the assets, separate entity, single tax that flows through to members (still 2 returns), may be perpetual, freely transferable
5 ways to pierce the corporate veil thin capital, lack of formality, co-mingling, personal use of assets, fraud
5 benefits of bankruptcy centralized litigation, stay on all pending litigation, discharge debt, exempt some assets, uniform process
lien Gives creditor right to the debtor's property. Liens must be settled before other creditors
guarantor Must be in writing, plaintiff must attempt to collect from debtor
surety Can be verbal, and creditor can sue debtor directly
mortgage attach real property to a debt by using mortgage instrument
two party Negotiable Instruments Note, certificate of deposite
Three party Negotiable Instruments Drafts, checks
The Security Contract test (Howie Test) a transaction in which a person 1 invests, 2) in a common enterprise, 3) reasonably expecting profit, 4) derived primarily or substantially from others' managerial or entrepreneurial efforts.
Prospectus Document describes the security being sold, financial operatiosn of the issuing corporation, and the investment or risk attaching to the security
Registration Exempt Transactions Regulation A - <5 mil/year for certain req's;Regulation D - Rule 504: non-investment company less than 1mil/year, Rule 505: private non-investment company less than 5mil/year, rule 506: private, noninvestment company unlimited amounts that are not public
Accredited Investor bank, insurance companies, investment companies, employee benefit plans, issuer's executive officers and director, and rich people
1933 act violation defenses 1) statement or omission was not material, 2) plaintiff knew about the misrepresentation at time of purchase, 3) defendant exercied due diligence in preparing the registration and reasonably believed at the time that the statements were true.
Scienter intent of wrongdoing or knowledge that an act is wrong
1934 act violation 1) material misrepresentation or omission of fact 2) scienter 3) connected with purchase of a security 4) causation, 5) loss
Created by: forceofgreed