BADM 300 UIUC EXAM 1 QUESTIONS
& ANSWERS(RATED A+)
Functions of the law - ANSWERkeeping the peace
shaping moral standards
promoting social justice
maintain status quo
facilitate orderly change
facilitate planning
basis for compromise
maximize individ. freedom
english common law (roots) - ANSWERlaw, equity, merchant courts
developed by judges issuing opinions + establishing precedent
Sources of Federal Law - ANSWERconstitution
treaties
statutes (legislative)
executive orders (executive)
regulations (executive)
judicial decisions: federal and administrative courts)
sources of state law - ANSWERconstitution
statutes
regulations/admin orders
judicial decisions
municipal ordinances
state v federal law - ANSWERfederal > state
constitution > statue > regulation
precedent - ANSWERcourt must follow the case law established by any higher court *in
that court's jurisdiction*
stare decisis - ANSWERstand by the decision (precedent)
sole proprietorship - ANSWERform of business in which owner is actually the business,
not a separate legal entity
most common form of organization
sp advantages - ANSWEReasy + inexpensive
full ownership control
right to all profits
, easily transferred or sold
sp disadvantages - ANSWERunlimited liability (personal capital/assets)
legally responsible for contracts/torts
taxes paid on personal income tax (form 1040, schedule C)
tort - ANSWERa wrongful act/infringement of a right
general partnerships - ANSWERassociation of two or more persons to carry on as co
owners of a business for profit
Uniform Partnership Act (UPA) - ANSWERmodel act that codifies partnership law
Revised Uniform Partnership Act (RUPA) - ANSWERissued by the national conference
of commissioners on uniform state laws, but not adopted by many states (limited
partnerships)
gp taxation - ANSWERflow through taxation
income and losses flow onto and have to be reported on individual partners' personal
income tax returns
gp management right - ANSWEReach partner has the right to participate in
management of partnership with equal vote (unless otherwise agreed upon)
general partnership rights - ANSWERshare profits equally
right to compensation (not entitled to receive salary unless agreed upon)
right to indemnification (reimbursement for business expenses)
right to return of loans
right to return of capital
right to information
duty of loyalty - ANSWERa duty not to act adversely to the interests of the partnership
duty of care - ANSWERobligation to use same level of care and skill that a reasonable
person in same position would use (breach is negligence)
duty to inform - ANSWERa partner owes to inform his or her copartners of all the
information he or she possesses that is relevant to the affairs of the partnership
duty of obedience - ANSWERrequires partners to adhere to provisions of the
partnership agreement and decisions of partnership
general partnership liability - ANSWERunlimited liability for the debts of partnership
joint and several liability - ANSWERtort liability of partners together and individually
& ANSWERS(RATED A+)
Functions of the law - ANSWERkeeping the peace
shaping moral standards
promoting social justice
maintain status quo
facilitate orderly change
facilitate planning
basis for compromise
maximize individ. freedom
english common law (roots) - ANSWERlaw, equity, merchant courts
developed by judges issuing opinions + establishing precedent
Sources of Federal Law - ANSWERconstitution
treaties
statutes (legislative)
executive orders (executive)
regulations (executive)
judicial decisions: federal and administrative courts)
sources of state law - ANSWERconstitution
statutes
regulations/admin orders
judicial decisions
municipal ordinances
state v federal law - ANSWERfederal > state
constitution > statue > regulation
precedent - ANSWERcourt must follow the case law established by any higher court *in
that court's jurisdiction*
stare decisis - ANSWERstand by the decision (precedent)
sole proprietorship - ANSWERform of business in which owner is actually the business,
not a separate legal entity
most common form of organization
sp advantages - ANSWEReasy + inexpensive
full ownership control
right to all profits
, easily transferred or sold
sp disadvantages - ANSWERunlimited liability (personal capital/assets)
legally responsible for contracts/torts
taxes paid on personal income tax (form 1040, schedule C)
tort - ANSWERa wrongful act/infringement of a right
general partnerships - ANSWERassociation of two or more persons to carry on as co
owners of a business for profit
Uniform Partnership Act (UPA) - ANSWERmodel act that codifies partnership law
Revised Uniform Partnership Act (RUPA) - ANSWERissued by the national conference
of commissioners on uniform state laws, but not adopted by many states (limited
partnerships)
gp taxation - ANSWERflow through taxation
income and losses flow onto and have to be reported on individual partners' personal
income tax returns
gp management right - ANSWEReach partner has the right to participate in
management of partnership with equal vote (unless otherwise agreed upon)
general partnership rights - ANSWERshare profits equally
right to compensation (not entitled to receive salary unless agreed upon)
right to indemnification (reimbursement for business expenses)
right to return of loans
right to return of capital
right to information
duty of loyalty - ANSWERa duty not to act adversely to the interests of the partnership
duty of care - ANSWERobligation to use same level of care and skill that a reasonable
person in same position would use (breach is negligence)
duty to inform - ANSWERa partner owes to inform his or her copartners of all the
information he or she possesses that is relevant to the affairs of the partnership
duty of obedience - ANSWERrequires partners to adhere to provisions of the
partnership agreement and decisions of partnership
general partnership liability - ANSWERunlimited liability for the debts of partnership
joint and several liability - ANSWERtort liability of partners together and individually
