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Business Associations, Ask: which image was the individual wearing? -…

- - - - Corp entity begins at filing of Articles of Incorporation w/ Secretary of State's office
    - - Promoter = causes corp to be formed, organized, financed; usu. become shareholders/officers/directors
        
        Personally liable as corp's agt on pre-incorp Ks entered on corp's behalf--corp can disclaim; continues until novation (corp adopts K & all parties agree promotor will be discharged from K)
        
        Corp not liable on any pre-incorp agreements unless assumes liability by own act after Articles or Incorp filed (express or implied)
    - - De jure corp = organized in compliance w/ statute but failed to comply w/ statutory provision
      - De facto corp = statutory compliance insufficient for de jure status; formed if: 1)good faith, colorable attempt to comply; and 2) corp principals, in good faith, acted as if were a corp
      - Corp by estoppel = creditor who has always dealt w/ principals as if they were a corp estopped from alter alleging corp defective; D who has held themselves out as corp cannot avoid liability by claiming no corp
    - - Treated like corp in protecting mbrs, mgrs, agts from liability for obligations of co, but attributes of partnership for fed income tax purposes
        
        Formed via articles of org w. sec. of state w/ at least 1 mbr
        
        Mrbs added with consent of other mbrs (unless agreement states otherwise)
        
        Mbrs control in proportion to equity at time vote taken (mbr-managed)
        
        Mbrs may agree to appt 1 or more mgrs to operate (mgr-managed)
  - - - Available causes of action:
        
        Against those who made misrepresentations in connection w/ purchase of securities
        
        Against those who traded in the stock while under duty either to disclose or abstain from trading until inside info disclosed
      - Elements:
        
        Misrepresentation of material fact
        
        Knowledge by D of misrepresentation or reckless disregard of truth
        
        Scienter (intent to deceive, manipulate, or defraud)
        
        Reliance on P
        
        Damages
- - - - Whether specific asset is partnership property or individual partner's property
        
        Partner's individual property
        
        Evidence of intent that any property originally brought in was not to be partnership property
        
        Partners have contrary intention from applicable law
        
        Partnership property
        
        Originally brought in - part of capital partnership (may contrarily contend in agreement)
        
        Subsequently acquired
        
        Purchased w/ partnership funds
      - Cash from sale of assets distributed in this order:
        
        Costs of the sale
        
        Outside creditors
        
        Inside creditors
        
        Capital contributions
        
        Profits
      - Issues when assets insufficient to cover partnership's obligations; partners must contribute amt necessary to cover liabilities; if 1 partner fails to contribute, other partners must make up difference, then seek contribution from that partner
      - "Advances" from a partner to keep failing business afloat = inside creditor loan (NOT capital contributions)
        If $ short and doesn't cover everything, add up loans & capital contributions, subtract from available cash, divide losses equally between partners
- - - - Agent = employee
        
        Respondeat superior
        
        Employer's liability in addition to agent's liability
        
        Employer/employee joint & severally liable
        
        Strict liability, no defenses
      - Agent = independent contractor
        
        GR: no liability
        
        Exception:
        
        Inherently dangerous activities (nature & circumstances of work will probably result in injury to others unless precautions taken)
        
        Nondelegable duty
        
        Loaned agt
        
        Negligent selection of contractor
  - - - Types of authority
        
        Actual = manifestation of principal to agt that agt acts for benefit of principal in particular way & principal agrees to be bound by agt's actions
        
        Express: principal expressly requests agt to act
        
        Implied: (1) authority to accomplish principal agt's request; or (2) things agt believes principal wishes them to do based on reasonable understanding of principal's expressed request
        
        Apparent = agt "cloaked" with authority
        
        3rd party reasonably believes agt has authority to act on principal's behalf
        
        Belief based on principal's representations made to 3rd party
        
        Ratification = principal grants retroactive authority for agt's earlier unauthorized action
        
        Ratified act one principal could have authorized at time of act
        
        Once ratified, same effect as if originally done w/ authority
    - - Disclosed v. undisclosed principal
        
        Undisclosed = agt personally liable in K
        
        Partially disclosed = agt personally liable in K; when 3rd party identity of principal, may go after either agt or principal but not both
        
        Fully disclosed = agt not liable in K
      - Breach of warranty of authority = agent acts beyond their authority on behalf or principal; agent personally liable