Study Guide - University of Phoenix



Week 1 Study Guide: Legal Forms of Business and Alternative Dispute Resolution

Readings and Key Terms

• Ch. 3 of Business Law

o Pleadings

o Discovery

o Settlement conference

o Trial

o Rebuttal

o Rejoinder

o Appeal

o Alternative dispute resolution

o Arbirtration clause

o Federal Arbitration Act

o E-courts and E-dispute resolution

• Ch. 34

o Entrepreneurship

o Sole proprietorship

o General partnership

o Limited partnership

o Limited liability partnership

o Limited liability company

o Corporation

• Ch. 35

o Limited partnerships

o Special partnerships

o General partners

o Limited partners

o Revised Uniform Limited Partnership Act (RULPA)

• Ch. 36

o Corporation

o Articles of incorporation

o Corporation types

o Common stock

o Preferred stock

o Debt securities

o Debt instruments

o Dissolution

• Ch. 39

o Limited liability company

o Limited liability company dissolution

o Limited liability partnership

• Ch. 40

o Franchise

o Distributorship franchise

o Processing plant franchise

o Processing plant franchise

o Area franchise

Content Overview

• Judicial, alternative, and e-dispute resolution

o Pretrial litigation process

• Pleadings

o Party who sues files complaint

o Based on complaint summons is issued

o Answer is provided by person being sued

o Cross-complaint can be filed by person sued in which case a reply must be sent by the original party

• Discovery

o Deposition is taken, which is oral testimony given prior to the trial

o Interrogatories are written questions given by one party to the other

o Production of documents are all of the documents that are secured by one party for use at trial

o Settlement conference: a hearing before trial to facilitate a settlement

• Trial

o Jury selection using process of voir dire

o Opening statements given by each party

o Plaintiff’s case: has the burden of proof to persuade trier of fact on the merits of the case

o Defendant’s case: rebuts plaintiff’s case; offers affirmative defenses; or proves allegations alleged in the cross complaint

o Rebuttal occurs when evidence is put forth to disprove the defendants case

o Rejoinder occurs when the defense offers evidence to refute the rebuttal

o Closing arguments to convince jury of their case

o Instructions, deliberations and verdict take place after the closing arguments; the judge reads the instructions to the jury and they consider all of the evidence (deliberate) and render a decision

o Judgment given by judge to the parties

• Appeal

o Appellant is the appealing party

o Appellee is the responding party to the appeal

• Alternative dispute resolution

o Arbitration

• Where contract contains arbirtration clause, the enforcement of clause is set forth in Federal Arbitration Act

• Impartial third party chosen to decide the dispute, which can be either binding or nonbinding on the parties

o Mediation: expert in disputed area helps parties to come to a settlement

o Minitrial: lawyers present a shortened version of trial to an agreed to expert who hears case; less expensive than trial and shows the case weaknesses and facilitates settlement

o Fact-finding: parties hire someone to investigate the dispute

o Judicial referee: parties agree to have court appoint a judicial referee to conduct a trial; decisions can be appealed

• E-courts and E-dispute resolution

o E-courts allow for electronic filings of court documents

o E-dispute resolution renders online dispute resolution in the form of arbitration

• Small business, entrepreneurship, and general partnerships

o Entrepreneurship occurs when an individual opens a business:

• Forms for opening a business: sole proprietorship, general partnership, limited partnership, limited liability partnership, limited liability company and corporation

• Sole proprietorship: business owned by one person who is personally liable for debts of business but takes all of the profits

• General partnership: two or more owners form business and where partners are personally liable for debts of partnership

• Limited partnerships and special partnerships

o Limited partnerships have general partners and limited partners

• General partners invest and manage the partnership and are personally liable.

• Limited partners invest but do not manage the business and, therefore, are not personally liable for the debts to the extent they exceed their contribution.

• In most states, the formation, operation, and termination of limited partnerships are regulated by the Revised Uniform Limited Partnership Act (RULPA), (Cheeseman, 2013, p. 582).

• Corporate formation and financing

o Corporation is a fictitious legal entity that is treated as a legal person and has the following:

• Free transferability of shares

• A perpetual existence

• Centralized management

• Limited liability of its shareholders to the extent of their capital contribution

o The articles of incorporation define the purpose of a corporation

• General purpose clause permits any activity permitted by law

• Limited purpose sets forth activities corporation can engage in

o Corporation types

• Domestic in the state of formation

• Foreign in states other than the one in which it is incorporated

• Alien if incorporated in another country

o Financing the corporation by stocks and debt securities

• Common stock represents the residual value of the corporation

• Preferred stock is security that has preferences and rights over common stock

• Debt securities create a debtor–creditor relationship where money is borrowed by the corporation

• Debt instruments are debentures, bonds, and notes

o Dissolution of the corporation

• Voluntary dissolution can occur where no shares have been issued.

• Administrative dissolution is ordered by the secretary of state for failure to follow administrative procedures.

• Limited liability companies and limited liability partnerships

o Limited liability company (LLC): formed under the Uniform Limited Liability Company Act

o Formation of an LLC: articles of organization must contain name, address, duration and management

o Limited liability of members on debts and obligations to the extent of their capital contribution

o Management of the LLC

• Member-managed shares rights equally among members to manage company

• Manager-managed LLC designates management in their articles of organization

o Dissolution of LLC occurs when a member withdraws or where the operating agreement eliminates a member’s ability to withdraw

o Limited liability partnership is created where all partners are limited and is formed by filing articles of limited liability partnership

• Franchises and special forms of business

o Franchise exists where the franchisor licenses the franchisee the trade name and other intellectual property for use to operate the business

o Types of franchises are the following:

• Distributorship franchise

• Processing plant franchise

• Chain-style franchise

• Area franchise

o Termination of a franchise occurs by breach of the franchise agreement

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