Business Law Exam 2 Word Scramble
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Question | Answer |
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
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