Agency
Agency
Duties of the agent
The agent has duties as stated in the contract and implied by law. Agent has a duty to perform, using reasonable care, diligence, and skill, for the benefit of the principal. He must obey all reasonable directions and notify the principal of all matters. An agent also has a fiduciary duty of loyalty such as avoiding secret profits and conflicts of interest.
Corporation
Shareholder's rights
Shareholders have voting rights in election and removal of directors, adoption and modification of bylaws, and fundamental changes to the corporate structure. They also have right to inspect the corporate books and records. They do not have the power to run the day to day affairs.
Agency
Definition of Agency
Agency is a consensual fiduciary relationship created when two parties manifest the intent that the agent will act on the principal's behalf and subject to the principal's control.
Corporation
Shareholder's duties
Shareholders generally do not have fiduciary duty to the corporation or to the other shareholders and can vote or sell their stock for their own personal benefit. Majority shareholders, however, cannot use their power to oppress the interests of minority shareholders.
Agency
Apparent Authority
Apparent authority is the authority that principal allows the agent to assume, or holds the agent out as possessing. Apparent authority exists when an agent makes an agreement which appears to be within the scope of his authority.
Corporation
Directors' duties
Directors' duties include the fiduciary duties of loyalty and due care. Duty of care requires the exercise of reasonable business judgment such as would be used by a prudent investor to manage his own affairs. Duty of loyalty requires directors to avoid conflicts of interest, undue influence, and personal gain at the expense of the corporation.
Agency
Partnership: Definition/Rule
A partnership is an association of 2 or more persons to carry on as co-owners of a business for profit. The partnership is a legal entity and generally treated as distinct from the individual partners. No formalities are required to form a partnership. In the absence of a formal partnership agreement, the parties' intent determines whether a partnership has been formed.
Corporation
Business Judgment Rule
There is a presumption that in making business decisions, directors of a corporation acted in the best interests of the corporation. P must overcome the presumption to prevail.
Agency
Partners' liability to Partnership
All partners are jointly and severally liable to pay partnership obligations. However, if a partner pays more than her pro rata share of any obligation, she has a right to seek indemnification from the partnership and the other partners.