Term
|
Definition
|
|
Term
|
Definition
| minimum code of conduct so as to maintain order in the society and separate civilized man from anarchy |
|
|
Term
written
judge made
administrative |
|
Definition
|
|
Term
constitutions
treaties
statutes |
|
Definition
|
|
Term
|
Definition
| basic contract between people and their government |
|
|
Term
|
Definition
| contracts between 2 nations |
|
|
Term
|
Definition
| laws passed by elected bodies/officials (ie Congress, the Texas legislature) |
|
|
Term
|
Definition
| laws passed by a city council are referred to as ______ (a type of statute) |
|
|
Term
common law
precedent
stare decisis |
|
Definition
| 3 types of judge made law |
|
|
Term
|
Definition
|
|
Term
|
Definition
|
|
Term
governmental agencies
IRS (see rev ruling 87-41) |
|
Definition
| two types of administrative law |
|
|
Term
|
Definition
| interpretation of internal revenue code |
|
|
Term
|
Definition
|
|
Term
| government v. defendant/accused/criminal/INDIVIDUAL |
|
Definition
|
|
Term
|
Definition
|
|
Term
|
Definition
who: gov/state v. individual
what: punishment |
|
|
Term
| government and all the people |
|
Definition
|
|
Term
|
Definition
|
|
Term
|
Definition
who: government and all the people
what: public good |
|
|
Term
|
Definition
|
|
Term
| individual (company) vs. (or AND) individual |
|
Definition
|
|
Term
|
Definition
|
|
Term
|
Definition
who: individual (company) vs (or AND) individual
what: about money |
|
|
Term
|
Definition
| legally enforceable promises |
|
|
Term
|
Definition
| what category of law involves contracts, property, and torts? |
|
|
Term
|
Definition
| land and/or personal property involved in a civil suit |
|
|
Term
|
Definition
| personal injuries and/or property damages |
|
|
Term
1. how is principle agency relationship created?
2. what is power of attonrey? what are the types?
3. what contractual liability can agent create for his principal?
4. what tort liability can agent create for his principal?
5. what is an independent contractor? |
|
Definition
| 5 things to know about agency law |
|
|
Term
1. employment
2. powers of attorney |
|
Definition
| how is the principal - agency relationship created? |
|
|
Term
|
Definition
| person who has another act for him |
|
|
Term
|
Definition
| the Principal can be thought of as _____ in terms of employment |
|
|
Term
|
Definition
| person who acts for another |
|
|
Term
|
Definition
| the Agent can be thought of as ____ in reference to employment |
|
|
Term
|
Definition
|
|
Term
|
Definition
| formal written authorization given by the principal to the agent to act for him/her (P) |
|
|
Term
| given by the Principal to the Agent |
|
Definition
| in power of attorney, who gives the formal written authorization, and who is it given to? (p or a) |
|
|
Term
general
special
durable (general or special) |
|
Definition
| types of power of attorney |
|
|
Term
| general power of attorney |
|
Definition
| power of attorney in which agent is authorized to do everything the principle could legally do while principal could legally do it |
|
|
Term
| special power of attorney |
|
Definition
| agent authorized to do only specified thing(s) for principal while principal could legally do them |
|
|
Term
| durable power of attorney |
|
Definition
| agent can continue to act for principal even when principal could NOT legally act for himself/herself |
|
|
Term
|
Definition
| IRS Form 2848refes to which kind of power of attorney? |
|
|
Term
|
Definition
| what federal form provided by the IRS allows for Special P of A |
|
|
Term
|
Definition
| duties of principal to agent and agent to principal |
|
|
Term
| utmost loyalty, trust, and good faith in dealings between principal and agent |
|
Definition
|
|
Term
|
Definition
| duties of principle to agent |
|
|
Term
1. obedience if legal
2. reasonable care
3. loyalty
4. duty to account for money
5. duty to notify regarding changed circumstances |
|
Definition
| 5 duties of agent to principal |
|
|
Term
1. by acts of parties
2. by operation of law |
|
Definition
| 2 broad methods of termination of power of attorney |
|
|
Term
1. completion
2. revocation
3. quit
4. time |
|
Definition
| methods of termination of power of attorney through acts of parties |
|
|
Term
|
Definition
| methods of termination of power of attorney through operation of law |
|
|
Term
| centralized authorization file |
|
Definition
|
|
Term
| power of attorney on form 2848 can only be executed by ONE person (not even married couple) |
|
Definition
|
|
Term
| to authorize an individual to represent you before the IRS. the individual must be an individual eligible to practice before the IRS |
|
Definition
| what is the purpose of form 2848? |
|
|
Term
| notice concerning fiduciary relationship |
|
Definition
|
|
Term
|
Definition
| stands in the position of a taxpayer and acts as the taxpayer NOT as a representative |
|
|
Term
|
Definition
| A power of attorney recorded in the CAF generally will be deleted how many years after it is first recorded? |
|
|
Term
|
Definition
| on a power of attorney, you may include only future tax periods that end no later than how many years after the date the power of attorney is received by the IRS |
|
|
Term
|
Definition
| computer file system containing information regarding the authority of individuals appointed under powers of attorney, gives IRS personnel quicker access to authorization information wihtout requesting the orginail document form the TP or represetnative |
|
|
Term
disease/injury
continuous absence from US for at least 60 days prior to date of filing |
|
Definition
| circumstances that permit another person to sign a return for you |
|
|
Term
| an agent or your representative |
|
Definition
| authority to sign your income tax return may be granted to: |
|
|
Term
|
Definition
| authorized to perform various acts on behalf of the partnership |
|
|
Term
| all partners must sign unless one partner is authorized to act in the name of the partnership |
|
Definition
|
|
Term
| taxpayer (grants the authority and THEN the representative signs, accepting the authority granted) |
|
Definition
| who signs form 2848 first? |
|
|
Term
| when A had the authority to enter into the contract |
|
Definition
| under what circumstances can an agent contractually obligate the principal? |
|
|
Term
|
Definition
|
|
Term
|
Definition
| relationship between principal and agent , when agent acts under Principal's authority |
|
|
Term
|
Definition
| types of actual authority |
|
|
Term
|
Definition
| clear, unequivocal authorization |
|
|
Term
| apparent actual authority |
|
Definition
| relationship between agents and third parties (others) |
|
|
Term
|
Definition
| everything reasonably and customarily necessary |
|
|
Term
|
Definition
| authority representing a vertical relationship |
|
|
Term
|
Definition
| type of authority representing horizontal authority |
|
|
Term
|
Definition
| relationship between agents and 3rd parties (others) |
|
|
Term
| if 3rd party could reasonably believe agent was authorized to act for principal,, even if not |
|
Definition
| under what circumstances is the principal contractually bound in apparent authority? |
|
|
Term
|
Definition
| even if P didn't authorize A to act, P still bound if P ratifies A's actions |
|
|
Term
| IF agent's receipt of notice is within A's actual or apparent authority |
|
Definition
| when does notice to A = notice to P? |
|
|
Term
| 3rd party doesn't know or reasonably shouldn't have known that agent is just Principal's agent, then agent is personally liable for broken contract (undisclosed principal) |
|
Definition
| When is agent personally liable to 3rd party under contract negotiated for principal? |
|
|
Term
|
Definition
| if 3rd part knows or reasonably should have known that agent is princiapl's agent, then agent has NO personal liability for a broken contract |
|
|
Term
|
Definition
| injury to person or damage to another's property which is compensable by money damages if the defendant was wrong |
|
|
Term
| principle is not liable because of what Principal did but because P's agent did something for which P is held responsible |
|
Definition
|
|
Term
| respondent superior/vicarious liability |
|
Definition
| principle is not liable because of what Principal did but because P's agent did something for which P is held responsible |
|
|
Term
| if the tort was within the scope of the employee's employment (general rule - applies in employer-employee relationship) |
|
Definition
| when is the employer (P) liable for a tort committed by his or her employee (A)? |
|
|
Term
| boss not liable for independent contractors actions (NOT employee) |
|
Definition
|
|
Term
|
Definition
| How would you determine is worker is an employee or independent contractor? |
|
|
Term
| IRS Rev Ruling 87-41's 20 factor test |
|
Definition
| determines when boss is responsible for paying employment taxes on workers |
|
|
Term
| amount and kind of control exercised |
|
Definition
| legal test/control test to determine worker relationship with boss |
|
|
Term
| if boss controls both METHOD and End Result then employee |
|
Definition
| control factor as applied to employee |
|
|
Term
| boss controls the END Result but not the METHOD OF PERFORMANCE |
|
Definition
| control factor test as applied to independent contractor |
|
|
Term
1. work expressly directed to be performed
2. work reasonably incidental to work expressly directed
3. some deviations |
|
Definition
| what is scope of employment? |
|
|
Term
deviation at all?
degree?
reasonably foreseeable by boss? |
|
Definition
| what 3 factors would you use to determine if deviations fall under scope of employment? |
|
|
Term
| no, but consider other factors |
|
Definition
| is commuting considered within scope of employment in Texas? |
|
|
Term
1. cell phone usage
2. texting
3. checking emails
(work related) |
|
Definition
| what factors could affect whether or not commuting is considered within scope of employment in Texas? |
|
|
Term
| voluntary association of 2 or more persons/companies engaged in 1 or more businesses as co owners for profit |
|
Definition
| definition of a partnership (6 parts) |
|
|
Term
|
Definition
| difference between partnership and join venture |
|
|
Term
|
Definition
| written document creating partnership |
|
|
Term
name
term
financial arrangements
management
dissolution |
|
Definition
| 5 items expressed in a partnership agreement |
|
|
Term
|
Definition
| each partner in partnership owns an undivided % interest in partnership which entities the partner to various privileges |
|
|
Term
|
Definition
| right to participate in management decisions unless managing partner chosen to handle daily operations |
|
|
Term
management rights
right to share in profits, losses, and other distributions |
|
Definition
| privileges of tenants in partnership |
|
|
Term
| tenants in partnership have right to share equally in partnership's profits unless partner agreement states to contrary |
|
Definition
|
|
Term
|
Definition
| how are losses distributed in a partnership among tenants? |
|
|
Term
| tenants in Pr have right to share in property upon dissolution |
|
Definition
|
|
Term
|
Definition
| duties and privileges of partners |
|
|
Term
| partners have loyalty duty to together partners and partnership; cannot compete against PR |
|
Definition
| how does fiduciary duty apply to partners? |
|
|
Term
pr is agent to partnership and all partners
partnership is principal |
|
Definition
| in regards to partners and partnership, what is the agency principal relationship? |
|
|
Term
look first to partnership assets
then to individual pr's assets (bc UNLIMITED LIABILITY) |
|
Definition
| satisfaction of creditor claims on partnership |
|
|
Term
look fist to individual partners other assets
then to partners' interest in Partnership (profits and property) |
|
Definition
| satisfaction of creditor claims on INDIVIDUAL PARTNERS |
|
|
Term
|
Definition
| can a creditor become a new partner? |
|
|
Term
| a partnership by definition is voluntary and new partners must be agreed upon |
|
Definition
| why can a creditor not become a new partner? |
|
|
Term
|
Definition
| can a partner collateralize interest in Pr for unrelated debt? |
|
|
Term
| yes - unless Pr Agreement states to the contrary (still cannot make Pr decisions) |
|
Definition
| can a partner assign his rights to receive property and profits from partnership to 3rd party |
|
|
Term
Partnership Agreement
tenants in partnership
partnership as voluntary association |
|
Definition
| 3 important factors of partnership assignability |
|
|
Term
|
Definition
| 2 step process for termination of regular partnership |
|
|
Term
|
Definition
| snap shot/point in time when Partnership starts to discontinue |
|
|
Term
|
Definition
| moving picture/on going process of ending the partnership |
|
|
Term
1. acts of the partners
2. operation of law
3. court dissolution |
|
Definition
|
|
Term
agreement
withdrawal
new partner |
|
Definition
| acts of the partners that can cause dissolution |
|
|
Term
death
bankruptcy
illegality |
|
Definition
| operation of law that can cause dissolution |
|
|
Term
incapacity
business impracticability
misconduct
deadlock |
|
Definition
| court dissolution that can cause dissolution of partnership |
|
|
Term
1. selection of liquidating partner
2. collect money owed to Pr by others
3. liquidation (turnning Pr property in $)
4. pay outstanding bills
5.distribute remaining assets to pr's in same % as profits (unless Pr Agreement states differently) |
|
Definition
| winding up procedure of a regular partnership |
|
|
Term
|
Definition
| turning Pr property into money |
|
|
Term
|
Definition
| does dissolution wipe out Pr liabilities? |
|
|
Term
|
Definition
| in dissolution, who/what is primarily responsible for Pr liabilities? |
|
|
Term
| JOINT and SEVERAL Liability (unlimited liability) |
|
Definition
| why are individual partners secondarily responsible for Pr Liabilities? |
|
|
Term
|
Definition
| biggest problem with regular partnership |
|
|
Term
1. buy sell agreement
2. value negotiated in good faith or book value |
|
Definition
| ways to avoid Pr dissolution (methods of continuation) |
|
|
Term
|
Definition
| partnership can continue after dissolution event (ie death) by purchase of deceased partner's interest if mandatory or optional buy sell |
|
|
Term
|
Definition
| partnership with one or more regular/general partners who have unlimited liability and one or more limited partners whose liability is limited |
|
|
Term
1. limited liability of limited partners
2. flexibility of financing
3. no double taxation (not corp) |
|
Definition
| advantages of a limited partnership |
|
|
Term
1. lack of direct control by ltd partners
2. sale o flmited partnership interests are securities
3. Texas margin tax
4. general partner has unlimited liability |
|
Definition
| disadvantages of a limited partnership LP |
|
|
Term
| compliance with federal securities laws would be necessary |
|
Definition
| why is the classification of LP interests as securities disadvantageous? |
|
|
Term
|
Definition
| when was the Texas margin tax effective and applicable to limited partnershipss LP? |
|
|
Term
capital contributions (initial and additional)
creation of ltd prs and general prs
managing general prs |
|
Definition
| what is expressed in a limited partnership agreement to form an LP? |
|
|
Term
| cash, property, and/or guaranties of ltd Pr loans |
|
Definition
| what kind of capital contributions can be received from ltd/general prs to finance an LP? |
|
|
Term
securities
capital contributions from ltd and general prs |
|
Definition
|
|
Term
|
Definition
| in an LP, who handles Lorinda matters? |
|
|
Term
| by vote of AL general and limited (silent) parnters |
|
Definition
| in an LP, how are extraordinary matters such as dissolution, mergers, etc handled? |
|
|
Term
|
Definition
| can limited partners be liquidating partner? |
|
|
Term
| limited liability partnership LLP |
|
Definition
| partnership composed of 1 or more individuals, regular partnerships, and/or corporations |
|
|
Term
| allows limited liability partners to avoid joint and several liability for torts of another LLP member while still having control (not silent partners) |
|
Definition
|
|
Term
avoids liability of individual limited liability partners for negligence of another firm member (still liable for his/her own negligence)
no contractual liability
no double taxation @US level (flow thru)
individual limited liability partners still have control |
|
Definition
|
|
Term
New York state doesn't recognize
Add LLP to firm name
now have to pay TX Franchise tax
1 year renewable life - not perpetual |
|
Definition
| 3 concerns regarding LLP's |
|
|
Term
limited liability
financing flexibility |
|
Definition
| advantages of a corporation |
|
|
Term
double taxation
Tx franchise tax |
|
Definition
| disadvantages of a corporation |
|
|
Term
1. domestic/foreign
2. public/private
3. business/nonprofit
4. publicly held/closely held
5. regular/professional
6. subsidiary |
|
Definition
| 6 classification types of corporations |
|
|
Term
|
Definition
| corporation in which a parent owns @ least a controlling interest |
|
|
Term
|
Definition
| idea person who puts idea with people who have financial expertise to make corporation formation a reality |
|
|
Term
|
Definition
| legal procedure by which a corporation is born |
|
|
Term
| articles of incorporation aka certificate of formation |
|
Definition
| similar to a constitution for the formation of a corporation |
|
|
Term
| certificate of incorporation aka acknowledgment of filing |
|
Definition
| similar to a corporate charter in regards for the formation of a corporation |
|
|
Term
elect officers
adopt bylaws |
|
Definition
| what happens in an organizational meeting to form a corporation? |
|
|
Term
|
Definition
| similar to statutes for corporate formation; the internal organizational procedures adopted during the organizational meeting |
|
|
Term
|
Definition
| $ owed by corporation to others which must be repaid plus interest |
|
|
Term
commercial loans
corporate bonds
corporate debentures |
|
Definition
| types of debt securities used to finance the corporation |
|
|
Term
debt securities
equity securities |
|
Definition
| 2 types of securities used to finance a corporation |
|
|
Term
|
Definition
| ownership interest in corporation in exchange for investment of money |
|
|
Term
|
Definition
| shareholders/stockholders, as of 1/1/2006, are now referred to as: |
|
|
Term
|
Definition
| in theory, a corporation could be analogous to what kind of government? |
|
|
Term
election or removal of board with or without cause
amendment to articles of incorporation
approval of extraordinary matters (ie merger) |
|
Definition
| shareholders voting rights |
|
|
Term
|
Definition
| a SH's "signed, written" authority to vote their shares to another |
|
|
Term
audit
governance
compensation |
|
Definition
| what board of directors committees are now required to be independent by federal law? |
|
|
Term
|
Definition
| shareholders' return on Sh investment that is similar to interest |
|
|
Term
|
Definition
| right if permitted in articles of incorporation for shareholder to purchase additional shares of corporation to maintain % of ownership |
|
|
Term
|
Definition
| attempt to treat corporation as a partnership so that all shareholders treated like partners so they can be sued individually |
|
|
Term
|
Definition
| example of attempt to "pierce the corporate veil" |
|
|
Term
|
Definition
| test to help determine whether or not a corporation should be treated as one |
|
|
Term
set corporate policy
determine dividends
select and supervise corp officers
select corporate financing
hold meetings and vote on these matters
governance (compensation/nominating committees)
audit committee |
|
Definition
| duties/responsibilities of board of directors |
|
|
Term
carry out board of director policies
select, supervise, and dismiss employees
agents of corporation |
|
Definition
| duties/responsibilities of officers in a corporation |
|
|
Term
|
Definition
| corporate reimbursement for damages suffered by innocent individual BoD officer if sued because of corp duties |
|
|
Term
obedience to the law
due care and business judgment rule
loyalty (fiduciary duty)
corporate opportunity |
|
Definition
| 4 duties of of corporate directors and officers affecting liability |
|
|
Term
| unpaid employment taxes and certification of quarterly/annual reports |
|
Definition
| corporate directors and officers have liability under the law for: |
|
|
Term
| due care and business judgment rule |
|
Definition
| and officer/director is not liable individually for informed decision made with some reasonable basis |
|
|
Term
|
Definition
| court decision determining that issues should be settled at annual shareholder meeting by vote, and that the court won't become a battleground for corporate decision making |
|
|
Term
| issues CAN be settled in court if B of D negligent or intentional B of D's actions not reasonable |
|
Definition
| exception for Board of Director actions under Schelnsky vs. Wrigley |
|
|
Term
| Francis vs. United Jersey Bank |
|
Definition
| court case in which a mother become CEO of her son's insurance company and was held liable for the company's wrongs |
|
|
Term
| Board of Director/officer have personal liability for negligent BoD acts or OMISSIONS |
|
Definition
| what was determined in Francis vs. United Jersey Bank? |
|
|
Term
| no! Francis vs. United Jersey Bank |
|
Definition
| is the defense of "Figurehead directors" effective in eliminating personal liability? |
|
|
Term
|
Definition
| contracts entered into with best interest of an officer/director |
|
|
Term
| board members can't seize corporate opportunities personally until 1st presented to corporation and refused |
|
Definition
| duty of corporate directors and officers in regard to corporate opportunity |
|
|
Term
| stockholder derivative suits |
|
Definition
| suits by shareholders on behalf of corporation vs. BoD/officers of corp seeking damages NOT for the suing SH's but for corp |
|
|
Term
|
Definition
| are attorney's fees collectable in stockholder derivative suits? |
|
|
Term
demand and refusal by B of D to act
must overcome reasonable business judgment rule
tough, but getting easier |
|
Definition
| 3 factors affecting stockholder derivative suits? |
|
|
Term
|
Definition
| corporation whose shares are owned by one or small # of shareholders |
|
|
Term
|
Definition
| in a close corporation, Texas law permits abolition of separate board of directors from shareholders |
|
|
Term
|
Definition
| problem with ownership in close corporation |
|
|
Term
| US Income Taxes (treated like partnership - no double taxation) |
|
Definition
| how is an S corporation treated differently than a close, regular corp? |
|
|
Term
|
Definition
| what is the limit of SH's for an S corp? |
|
|
Term
| LLC limited liability companies |
|
Definition
| relatively new non corporate business entity that is not a corporation but not a partnership |
|
|
Term
|
Definition
| in what year did LLC's become effective in Texas? |
|
|
Term
|
Definition
| what kind of LLC is similar to a corporation? |
|
|
Term
|
Definition
| what kind of LLC is similar to a partnership? |
|
|
Term
| treated like a partnership |
|
Definition
| how are LLCs treated for federal income tax purposes? |
|
|
Term
|
Definition
| do LLCs have any ownership restrictions, numerical or otherwise? |
|
|
Term
|
Definition
| in an LLC, members have limited liability and all can still participate |
|
|
Term
|
Definition
| must an LLC pay the Texas Franchise/Margin Tax? |
|
|
Term
| 1/1/2007 by the Texas margin Tax |
|
Definition
| by what and when was the Texas Franchise Tax amended? |
|
|
Term
ENTITIES GRANTED LIMITED LIABILITY
ie corps, llc, ltd. ptr, gen pr whose partners are not individual persons |
|
Definition
| to whom is the Texas franchise/margin tax charged? |
|
|
Term
sole proprietorships
general partnerships whose partners are individuals |
|
Definition
| Texas franchise/margin tax is NOT charged to: |
|
|
Term
.5/1% of lesser of
profit margin
revenue - compensation
70% of revenues |
|
Definition
| calculation of Texas margin tax |
|
|
Term
| revenues less than 1,030,000 or total tax < 1000 |
|
Definition
| $ restrictions of Texas margin ta |
|
|
Term
| dividends and interest from federal obligations |
|
Definition
| exclusions from revenue when calculating texas margin gtax |
|
|
Term
| RETAIL/WHOLESALE TRADE, EATING AND DRINKING ESTABLISHMENTS |
|
Definition
| for what entities if the Texas margin tax rate .5%? |
|
|
Term
| with annual revnue of $10 million or less |
|
Definition
| what type of entities can use the Texas margin tax EZ computation? |
|
|
Term
economies of scale
diversification
supply source
talented people
eliminate competitor |
|
Definition
|
|
Term
1. board of director approval by both boards
2. shareholder approval by both corporations shareholders
3. regulatory approval |
|
Definition
| 3 step procedure for statutory merger/consolidation |
|
|
Term
| buy disenting shareholer at at the fair market value @ time voted no to merger |
|
Definition
| what must the merged corporation do if shareholder opposes merger and votes aginst it? |
|
|
Term
| requires shareholder approval if extradorndary evnet |
|
Definition
| problem with combining/merging by purchasing all or major portion of other corps assets |
|
|
Term
|
Definition
| public conditional offer to buy exact # of shares with right to refuse if too few offered or right to reduce if too many offered |
|
|
Term
| reasonable business judgment rule |
|
Definition
| shark repellent take over defenses must be permissible under: |
|
|
Term
| poison pill white knight, greenmail |
|
Definition
| shark repellent take over defenses |
|
|
Term
| aritcles of dissolution/certificate of termination |
|
Definition
| paperwork involved in termiantion of a corporation |
|
|
Term
collect corp assets and liquidate
collect outstanding AR owed to corp by others
pay corp bills
distribute remaining assets to Pref SHs and CS holders |
|
Definition
| process of winding up/liquidation of a corproation |
|
|
Term
|
Definition
| regulates initial issuance of securitites by corporation |
|
|
Term
registration before initial sale,
prospectus to initial buyers |
|
Definition
| requirements from securities act of 1933 |
|
|
Term
|
Definition
| regulates secondary sale of securities by individual Shareholders, also regulates securities brokers, and created the SEC |
|
|
Term
|
Definition
| which securities act created the securities and exchange commission? |
|
|
Term
| participation in almost every profit sharing arrangement where you profit from others' work |
|
Definition
| summary of a what a security is: |
|
|
Term
| note, stock, bond, debenture, investment contract, undivided % in oil, gas, and mineral rights |
|
Definition
|
|
Term
| investment of money, in common enterprise with others, profiting solely from efforts of others and not arising from investor's work (passive investment) |
|
Definition
| characteristics of investment contract |
|
|
Term
|
Definition
| known as the "thruth in Securities Law" |
|
|
Term
|
Definition
| requires disclosure and results in informed decisions about securities |
|
|
Term
| 20 days after filing unless SEC objects |
|
Definition
| when is a registration statement, as required by the securities act of 1933, effective? |
|
|
Term
tombstone ads and red herrings
(preliminary advetisenents) |
|
Definition
| exceptions to the securities act of 1933's requirement of a prospectus accompanying sale of securities |
|
|
Term
|
Definition
| what section of the 1933 act states that registration and prospectus is required? |
|
|
Term
|
Definition
| what section of the 1933 act says it's illegal to provide false, fraudulent, or misleading information regarding issue of securities |
|
|
Term
secondary trading
small issuers
small issues
local offerings & intrastate offerings
accredited investor |
|
Definition
| exemptions from 1933 act registration requirement |
|
|
Term
| in 12 month period, total offerings $1M or less (small companies rule 504) |
|
Definition
| small issuer exemption from registartion: |
|
|
Term
| no more than $5M, 35 UN accredited investors, and no general advertising (rule 505) |
|
Definition
| small issues exemption from registration |
|
|
Term
| issuing company does 80% or more of its business in 1 state and offers and sells stock only to that state's residents |
|
Definition
| instrastate offering exemption from registration |
|
|
Term
| accredited investor exemption from registration |
|
Definition
| rule 506 in regards to registration requirement of 1933 act |
|
|
Term
| insiders, individual net worth >$1M, individual with annual income >$200K, or Buys $150K stock at once |
|
Definition
| who is an accredited investor in relation to rule 506? |
|
|
Term
| stop orders and subpoena powers |
|
Definition
| enforcement ability of government for the 1933 securities act |
|
|
Term
| fine up to $10K, prison up to 10 years, or both |
|
Definition
| 2002 law penalties to enforce 1933 act |
|
|
Term
| everybody who signs it and who prepared it (acct/law firm) |
|
Definition
| if the registration statement contains untrue material information or omits materila information, who is liable? |
|
|
Term
| guilty neither of fraud or negligence - used due diligence in preparing registration statement |
|
Definition
|
|
Term
| misstatement or omission ofm aterial fact w/out due diligence creates liabilty even if exempt from registration |
|
Definition
|
|
Term
all companies whose securities are traded on national stock exchange OR
companies with >$5M assets and >500 shareholders |
|
Definition
| who falls under disclosure requirements? |
|
|
Term
|
Definition
| all matters which there is a substantial likelihood that a reasonable investor would consider important must be disclosed |
|
|
Term
| officers, directors, owners of more than 10% corporate stock |
|
Definition
| who are considered INSIDERS for short swing profits purpose (1934 act)? |
|
|
Term
| initially and monthly reports of stock transactions |
|
Definition
| according to the securities exchange act of 1934, how often must stock transaction reports be filed? |
|
|
Term
| purchase and sale within 6 months is illegal, even if didn't know inside info |
|
Definition
| illegality of short swing profits (time span) |
|
|
Term
profits made/losses prevented recouped by corporation
lowest purchase price matched with high sales price
no offset for losses allowed |
|
Definition
| penalty for short swing profits sales |
|
|
Term
| unlawful to sue fraudulent scheme, make or omit material untrue statements, or engage in any fraudulent or deceptive act to sell securities |
|
Definition
|
|
Term
| protects investing public by preventing fraud and equalizing access to material information |
|
Definition
| applicability of rule 10 B |
|
|
Term
|
Definition
| requires disclosure of material inside information OR abstention from trading while info is undisclosed |
|
|
Term
| 25 years prison, up to $1M fines for each charge, disgorgement of illegal projects, penalty up to 3x profits |
|
Definition
| punishment for violation of rule 10B insider trading |
|
|
Term
| any corporate employee with access to inside info |
|
Definition
| insiders as classified by rule 10B insider trading |
|
|
Term
|
Definition
| receive confidential info during "Short term" job (accts/lawyers in M&A) |
|
|
Term
| if corporation fraudulently misleads or fails to disclose material information, injured party who traded may sue for damages |
|
Definition
|
|
Term
|
Definition
| provides a safe harbor for companies in which wrong estimated profit projects are NOT actionable if projects had warnings |
|
|
Term
|
Definition
| authorization to vote shares of another SH typically to corporate management |
|
|
Term
|
Definition
| what regultes proxy soliciations? |
|
|
Term
| the SEC in case of proxy fight |
|
Definition
| what regulated proxy solicitation material? |
|
|
Term
| annual report and last 2 years' audited financials |
|
Definition
| material that acoompnies board of director election |
|
|
Term
|
Definition
| public purchase of corp stock to gain control of corp |
|
|
Term
| person or group acquiring 5% or more of shares must give info about purpose, background of proposed purchaser |
|
Definition
| filing requirement to SEC in takeovers |
|
|
Term
| mail tender offer to Sh's or provide tender offeror with list of names and addresses of shareholders; file report with SEC about sale, negotiations, and other offers |
|
Definition
| management response to tender offers |
|
|
Term
|
Definition
| how long must a tender offer be open? |
|
|
Term
|
Definition
| what price must the Tenderor give to all selling SH's? |
|
|
Term
auditing
tax practice
management advisory services |
|
Definition
| sources of accountants' legal liability |
|
|
Term
|
Definition
| independent review of businesses' financial records and statements to determine accuracy and reliability |
|
|
Term
collection of data
analysis of data
report of data and conclusion |
|
Definition
|
|
Term
| contract theory of liability |
|
Definition
| employment contract between firm and client |
|
|
Term
due care
diligence
honesty
independently perform duties and give opinions |
|
Definition
| duty of auditing firm (acting as independent contractor) to the client |
|
|
Term
| negligence theory of liability |
|
Definition
| failure to use due care of failure to observe professional stands - accounting malpractice |
|
|
Term
|
Definition
| exercise of special care and skill of typical auditor |
|
|
Term
|
Definition
| exercise of special care and skill of typical auditor |
|
|
Term
|
Definition
| establishes the objectives of audit and quality of performance |
|
|
Term
|
Definition
| 3 main GAAS qualify of performance factors |
|
|
Term
|
Definition
| theoretical aspects of how transactions should be reported on corp books |
|
|
Term
find and report fruad - ACIPA
more red flags |
|
Definition
|
|
Term
| minimum standard of professional conduct for corp lawyers and accts |
|
Definition
|
|
Term
| evidence of negligence and possible loss of CPA license |
|
Definition
| penalties for violation of GAAP /GAAS |
|
|
Term
lack of reliance
disregard of auditor's recommendations
prevention of duties
careless employee supervision (not in Tx!)
client contributory negligence |
|
Definition
| defenses from negligence theory of liability |
|
|
Term
old privity of contract defense (contacts/ultra mares)
known user
intended user
foreseeable user |
|
Definition
| levels of liability to 3rd parties |
|
|
Term
| old privity of contract defense/contracts/ultramares |
|
Definition
| accountant only liable to persons who dealt with and not 3rd parties |
|
|
Term
| known user rule/restatement rule |
|
Definition
| accountant liable if knew 3rd part or class in which 3rd party was a member would use work product; reliance was know |
|
|
Term
|
Definition
| persons accountant expected or intended to rely on work |
|
|
Term
|
Definition
| accountant could or should reasoanbly foresee even if didn't actually know |
|
|
Term
|
Definition
| what rule for liabilty to 3rd parties does Texas fllow? |
|
|
Term
miscalculate taxes
not taking lawful deductions
not filing return |
|
Definition
| methods of tax practice negligence/malpractice |
|
|
