Agency
Agent/Principal: The party who acts for the other is called an agent. The party who gives the agent authority is
called the principal.
Agency: Agency law governs the legal relationship between two parties in which one gives the authority to act
on their behalf to the other. (Capacity, Consent, Control)
Liability in contract of the principal for the acts of the agent?
Principal is liable for contracts entered into by its agent if the principal authorized the agent to enter the
contract.
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Fiduciary Duties in Agency/Employment Situations
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Employee or Independent Contractor
Partnerships vs Joint Venture
Partnership: The association of 2 or more people to carry on as co-owners of a business for profit. Formed
through conduct to show intent. Profit sharing creates a presumption of partnership unless merely sharing
profits w/ an investor.
3 Types of Partnership:
1. General Partnership (GP): (Default), No cert filing necessary, jointly & severely liable for debts.
2. Limited Partnership (LP): Formalities required- file cert with Sec of State. An LP consists of one or more
general partners and one or more limited partners. General partners remain personally, jointly, and severally
liable for all debts of the LP, while limited partners are personally liable for debts only to the extent of their
investment in the LP.
3. Limited Liability Partner (LLP): An LLP limited partner’s potential liability for professional malpractice
that is committed by another partner. Any partnership may become an LLP upon the: (1) Approval of the
partners by vote; AND (2) filing a statement of qualification with the secretary of state.
Joint Venture: More limited in scope and duration, but rules of P law apply
4 Elements of Joint Venture:
1. Contribution by parties of money, property, time, skill, but contribution need not be equal
2. A proprietary interest and right of mutual control over property
3. Express or implied agreement for the sharing of profits / losses
4. Express or implied K showing a joint venture was formed
Unit 3 – Corporations
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The Nature of the Corporation – The Corporate Entity and its Formation and Structure; The Corporate
Entity and Limited Liability; The Role and Purpose of Corporations;
Unit 4 – LLC and LLPs
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Formation, the operating agreement, piercing the LLC veil, fiduciary obligation, additional capital, and
dissolution.
o What role does the operating agreement play when it comes to liability?
o What factor does the “ordinary course of business” play when it comes to liability?
o Piercing the corporate veil
 2 grounds to base a claim: Totality of Circumstances (elements) and Theory of
Unfairness (general claim in equity)
o Authority Issues Apply in LLCs (Actual, Apparent…) this often determine liability on contracts.
Unit 5 - Duties of officers, directors, and other insiders
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including the obligations of control: duty of care, duty of loyalty, and the obligation of good faith
o Define and Apply Duty of Care
o Define and Apply Duty of Loyalty
o Define and Apply the Business Judgement Rule (BJR)
Unit 6 – Duties Cont.
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Director independence, the derivative demand and Board oversight, and futility and the Aronson &
Rales principles
Unit 7 – Duties and Securities
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Disclosures, duties of officers, directors, and other insiders
o Fairness & disclosures
More on Derivative vs Direct Actions
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Know the Definitions & Requirements of both
How does the BJR come into play?
Can a direct or derivative action be brought to compel corp practices?
o Rule 14a-8(i)(7) “Ordinary business exclusion” see Trinity Wall Street v. Wal-Mart Stores, Inc.
More notes on Federal Securities Law
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Registration of securities
Rule 10b-5, inside information and insiders
Section 16(b) and short-swing profits
Summarize the Federal Securities Laws
Identify and analyze the facts giving rise to actions under the Securities & Exchange Acts
Identify and analyze the facts giving rise to actions under Rule 10b-5 and Section 16b of the Securities
& Exchange Acts.
Describe the ways in which Officers and Directors run afoul of the Federal Securities Laws and the
implications for shareholder actions.
Describe the duties placed upon certain non-insiders under Section 16b and Rule 10b-5.
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Summarize the ways in which shareholders in non-public or closely held corporations exercise their
powers and respond to duties.
Identify and analyze the salient distinctions between public and non-publicly or closely held
corporations and the rules applicable to problems arising in either form of the corporation.
Describe the circumstances and methods by which corporate control is transferred.
Describe the rules applicable to the duration and dissolution of corporations.
Unit 8 – Control
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proxies and proxy fights
shareholder proposals
shareholder inspection rights / when, what info, where, under what circumstances?
Unit 9 – Control Cont.
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shareholder voting control
closely held corporations
o Define closely held corporation
o control, abuse of control, duration, dissolution, and transfer of control of closely held corp.
Unit 10 – Mergers & Acquisitions: Freeze-Outs, De Facto Mergers, and LLC Mergers
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High level understanding and process
Unit 11 – Takeovers and introduce the concept of corporate debt
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High level understanding and process
Demonstrate basic knowledge of the ways in which fiduciary duties are fulfilled or breached with
respect to takeovers.
Identify and analyze the basic forms of resistance to takeover offers and the circumstances in which
resistance is proportionate to threats or is disproportionate.
Describe the circumstances and methods by which resistance to takeovers must evolve into auctioneer's
duties.
Describe the basic structure, implications, and methodologies of corporate debt instruments.