Corporate Liability In Oregon

Josh and Mary are partners and decide to form an LLC. They decide to save on legal fees and do not create an Operating Agreement. After nine months, Mary decides to leave the LLC. How will Mary's ownership interest be calculated? Group of answer choices The value of the LLC can only be determined by agreement of the Members. The Oregon Limited Liability Company Act will provide a formula. Only a court with proper jurisdiction can determine the value of the LLC. The value of the LLC must be determined by a third-party appraiser.

A local Limited Liability Partnership (LLP) is comprised of six senior CPAs, each of whom has 20 years or more of practice experience. The LLP hires a newly licensed CPA and assigns one of the senior CPAs to supervise. The junior CPA is assigned a significant workload and files a corporate tax return containing multiple material errors. The corporation brings a lawsuit against the LLP and is successful, recovering a large judgment. The malpractice insurance of the LLP is not sufficient to cover the amount of the judgment. How will personal liability be determined to cover the remainder of the judgment? Group of answer choices Only the junior CPA will be held personally liable Only the senior supervising CPA will be held personally liable All of the CPAs of the LLP will be held personally liable The junior CPA and the supervising senior CPA will be held personally liable

When the owners of a Limited Liability Company (LLC) take a passive role in day-to-day management activities, the owners likely chose what type of management structure? Group of answer choices Board-managed Agent-managed Manager-managed Member-managed

Robert entered into a loan agreement with his local credit union on behalf of his LLC to obtain funds to expand his business. When signing the loan agreement, the LLC was listed as borrower, and Robert signed the agreement as Member of the LLC and individually. The local market suffered an economic downturn and Robert closed his business. Without any further revenue, Robert defaulted on the loan. The bank foreclosed on the assets of the LLC but this was insufficient to cure the default. The credit union is now attempting to collect from Robert's personal assets. Will the credit union be successful? Group of answer choices Yes, because Robert was also a borrower Yes, because financial loans always disregard business entities No, because the loan agreement was between the LLC and the credit union, Robert was simply an agent of the LLC No, because the primary purpose of the LLC form is to shield personal assets from liability

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Raymond started a home insulation business and was quickly very successful. At the advice of his CPA, Raymond formed an LLC. If Raymond wants to reduce his self-employment tax liability, what type of tax treatment should Raymond choose? Group of answer choices Pass-through partnership S-Corporation C-Corporation Pass-through sole proprietorship

Rebecca is a member of the board of directors of FalleeMay, INC., a large cosmetic company. Rebecca has worked in the industry for more than thirty years and has served on various boards in the industry. While overseeing a board committee of FalleeMay, INC., Rebecca is presented with a novel ingredient for facial serums. FalleeMay, INC., is not currently developing facial serums, and is focused on makeup products. Rebecca remembers one of her previous company's, SkinLife, INC., is currently in the process of launching a line of serums. Rebecca passes the information along to SkinLife, INC. If FalleeMay, INC., learns of Rebecca's conduct, what is the likely conclusion? Group of answer choices Rebecca has breached her duty of disclosure Rebecca has breached her duty of loyalty Rebecca has breached her duty of care There is no issue because the information did not pertain to FalleeMay, INC., as it does not produce serums

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Miles Stone, LP, is an Oregon Limited Partnership, whereby Melissa Miles is the general partner, and Patrick Stone is the limited partner. Miles becomes ill and is required to take some time away from the LP. Stone steps in and temporarily assumes Miles's responsibilities. A lawsuit is filed against the LP by a creditor seeking liability of both partners, if successful, how will liability be determined? Group of answer choices Neither partner will be held liable because this is a limited liability entity Both partners will be held liable because both participated in management Only the general partner will be held liable Only the limited partner will be held liable

We discussed a case, Drake Manufacturing Co. v. Polyflow, Inc., in which the court stated that a business is not required to register as a foreign entity (registered to do business) in a state simply because it seeks to file a lawsuit in that state. Nevertheless, Drake (a Delaware company) was denied its ability to bring a lawsuit against Polyflow in Pennsylvania because: Group of answer choices Polyflow was not "at home" in Pennsylvania The contract stated Delaware law would apply Drake had a facility in Pennsylvania and failed to register as a foreign entity The court did not have jurisdiction

GreenOregon, INC., receives its registration from the Oregon Secretary of State, as a registered nonprofit corporation and immediately begins raising funds for its charitable purpose. The donors of GreenOregon, INC., will be able to deduct their charitable contributions? Group of answer choices True False

How does taxation change for an LLC when the S-Corporation election is made? Group of answer choices The LLC now has an entity (corporate) level tax The LLCs can now enjoy lower corporate tax rates The LLC can separate reasonable compensation and distributions The LLC can benefit from retaining its earnings

Traditionally, members of the board of directors of a corporation must fulfill the primary purpose of maximizing the profits of its shareholders. Many states have provided new legislation to allow business entities more freedom to consider the corporation's impact on its employees, customers, local communities, society and the environment. This new legislation creates what type of entity? Group of answer choices Public Organization Benefit Corporation Social Organization Nonprofit Corporation

Oregon does not recognize de facto corporations. Group of answer choices True False

Matthew, Chief Executive Officer (CEO) of WaterSport, INC., attends a board meeting in which the board of directors approves a contract and Matthew is instructed to execute the contract on behalf of the corporation. When Matthew meets with the counter party to sign the contract, the other party requests that the term of the contract change from 15 years to 30 years. Matthew agrees and signs the contract. What, if any, principle is applicable here? Group of answer choices Good Faith and Fair Dealing Doctrine Conflicting Purpose Doctrine Duty of Care Doctrine Ultra Vires Doctrine

A court will engage in Piercing the Corporate Veil when all of the following occur, EXCEPT: Group of answer choices Unfair Employment Practices Intentional Insolvency Alter Ego Theory Commingling of Assets

What doctrine invokes judicial deference, similar to that of Chevron discussed during our study of Administrative Law? Group of answer choices The Separate Corporate Form Rule The Officer & Director Limited Liability Rule The Business Judgment Rule The Anti-piercing Veil Rule

In order to assert legal rights associated with trademark ownership, whether by way of common law or statutory law, the protected mark must be: Group of answer choices Limited in use Generic Registered Placed in commerce

Infringement of intellectual property (trademark, copyright, patent) must involve an exact copy of the protected intellectual property. Group of answer choices True False

A local singer just created a new song with a catchy melody and performs it live at a local event that supports artists in the community. Does the live performance of the song invoke copyright protection? Group of answer choices Yes, the artist has witnesses to the original performance No, because it was not fixed in a durable medium Yes, creative works automatically receive copyright protection No, because it was not registered at the US Copyright Office

Courts determine whether creative works are copyrightable by looking at the idea and the expression of the idea. Whenever an idea and an expression are inseparable, the expression CANNOT be copyrighted. The idea and the expression must be separate in order to copyright the expression. This is a well-known doctrine established by the 9th Circuit and is referred to as: Group of answer choices The Independent Expression Doctrine The Derivative Idea Doctrine The Expression of Copyright Doctrine The Merger Doctrine

The Fair Use Exception, which allows use of copyrighted works, includes all of the following activities EXCEPT: Group of answer choices Creating derivative works Teaching for a nonprofit institution Criticism News Reporting

Shareholders have a right to review corporate records after providing proper notice to the corporation in accordance with the terms of the corporation's bylaws. This right is known as: Group of answer choices Shareholder Due Diligence Rights Shareholder Oversight Rights Shareholder Inspection Rights Shareholder Derivative Rights

Two individuals are exploring a potential business partnership and they engage in a series of conversations in which each of them shares proprietary, confidential information. What type of legal agreement would provide protection in this case? Group of answer choices Mutual IP Assignment Agreement Mutual Nondisclosure Agreement Mutual Licensing Agreement Mutual Employment Agreement

What is the strongest category of distinctiveness for a trademark? Group of answer choices Fanciful Suggestive Generic Arbitrary

What is the primary legal relief sought and granted in an intellectual property infringement lawsuit? Group of answer choices Injunctive Relief Specific Performance Punitive Damages Reliance Damages