Legal Environmental Business Questions

1. How long copyrights are valid?

The term of copyright for a particular work depends on several factors. Copyright protection may be affected if the copyright has been published, and, if so, the date of first publication. Generally, for works created after January 1, 1978, copyright protection lasts for the life of the author or copyright owner plus an additional 70 years. For example, if the author is now age 21 and lives 75 more years, copyright protection would last for 145 years.

2. Land Use Regulation: The government may take private property for public use

under the power of __________ eminent domain______.

3. Briefly describe the Securities Act of 1933 vs. the Securities Act of 1934.

The 1933 Act requires that, before offering or selling securities, the issuer must register the securities with the SEC, unless the securities qualify for an exemption. When an issuer registers securities, the SEC does not investigate the quality of the offering. Applies to initial issue of securities, including IPOs and sales of new securities by established companies. Includes issue of securities online. Purpose: require full and honest disclosure of information to investors & prohibits fraud in any securities transaction Securities Exchange Act of 1934

Secondary trading of those securities between persons (vs. original issuance for Act of 1933) Designed to prevent fraud in subsequent trading of securities.. Regulates securities exchanges, brokers, and dealers. Requires continuous reporting to investors and SEC.

4. Why is certificate of incorporation important?

The Certificate of Incorporation is a key document produced in connection with a venture capital portfolio investment. Among other things, the Corporation’s Certificate of Incorporation establishes the rights, preferences, privileges and restrictions of each class and series of the Corporation’s stock. That’s why it’s very important for all kinds of business.

5. Describe the relationship among Shareholder, Board director and Officer.

A corporation is governed by a board of individuals known as directors who are elected by the shareholders. Directors may directly manage the corporation’s affairs when the corporation is small, but when the corporation is large, directors primarily oversee the corporation’s affairs and delegate the management activities to corporate officers. Directors usually receive a salary for their work on the corporate board, and directors have a fiduciary duty to act in the best interests of the corporation. These fiduciary duties require the directors to act with care toward the corporation, to act with loyalty toward the corporation, and to act within the confines of the law. A director who breaches this fiduciary duty may be sued by the shareholders and held personally liable for damages to the corporation.

6. Fill out the blanks of following table on Authorized/Issued/Outstanding stock. Assume the article of incorporation of ABC Company in 2010 told the maximum limit of stock issuance to be 10,000 shares. In 2010, the friends and family of the founder of ABC Company received half of maximum shares for their investments. In 2011, the Company repurchased 1,000 shares from the investors.

ABC Company| 2010| 2011|
No. Authorized stock| 10,000| 6,000|
No. Issued stock| 5,000| -|
No. Outstanding stock| 5,000| -|

7. For liability and tax perspective, what are the advantage and disadvantage of C-Corporation? (Compared with Partnership/Proprietor) Then, what’s the benefit of S-Corporation? (Compared with C-Corporation)

One of the primary advantages of starting a C corporation is that it allows for many owners. If you plan on starting a large corporation with thousands of shareholders, this is the route to take. The C corporation is the method of choice for publicly traded companies. Another advantage for C corporations is the lower tax rate on the first $75,000 of business income. This means that even if you have a small business, the C corporation can be beneficial.

One of the primary disadvantages of the C corporation is double taxation. With this type of business entity, you have to pay taxes at the corporate level, and then once the profits are distributed to shareholders, they must pay taxes on the money they receive as well. This maximizes the amount of money that goes to the government. Another drawback of using a C corporation is that it requires a great deal of formality. You must have shareholder meetings, a board of directors and corporate minutes. One of the major advantages of the S corporation, unlike the C corporation, is the pass-through taxation. This means that the income from an S corporation is simply passed onto the shareholders of the company instead of being taxed at the corporate level. Shareholders then pay taxes on this money at their marginal tax rate. Owners can also minimize self-employment taxes with this type of business structure. Salaries are subject to self-employment taxes, but distributions are not.

8. Briefly explain The Age Discrimination in Employment Act. Age Discrimination in Employment Act of 1967, or ADEA , was created to help prevent age related discrimination in the workplace against people who are age 40 or older. The term discrimination in this context applies to companies and their employees, but the company must have at least 20 people working there at any given time for the law to apply. In terms of discrimination, it prohibits such acts against people 40 or older , including making hiring or layoff decisions, denial of benefits, making statements or notices pertaining to specific ages, and forcing people to go into mandatory retirement. This Act covers a much broader range than mentioned, but these are the basic foundations. The law also applies when it comes to employers determining compensation.

9. Employee of a company can be regarded as either Principal-Agent Relationship or Employer-Employee Relationship. Why? Managing these relationships is vital to business success, as strong relationships can lead to greater employee happiness and even increased productivity. To reap these benefits, keep the dynamics of your employer-employee relationship in mind. Generally, employer and employee relationships should be mutually respectful. The degree of closeness in these relationships will depend on both the employer and the employee. Some employers opt to keep their employees at a distance and, in doing so, ensure that there is no confusion as to the hierarchy that exists between them. Others elect to become friendlier with their employees, seeing this as a way to amp up employee happiness. While neither option is entirely right or wrong, it is wise to avoid getting too close to employees, as doing so can cause the line between employer and employee to become blurred.

10. What is Automatic Stay? Why is the legal rationale?

Automatic stay is an automatic injunction that halts actions by creditors, with certain exceptions, to collect debts from a debtor who has declared bankruptcy. The stay begins at the moment the bankruptcy petition is filed. Secured creditors may, however, petition the bankruptcy court for relief from the automatic stay upon a showing of cause.

The legal rationale behind the Automatic Stay is twofold. It protects the debtor from creditor actions, giving the debtor breathing room. It also benefits creditors by preventing one creditor from having an advantage over other creditors. Bankruptcy is supposed to be an orderly process of liquidating a debtor’s assets and determining the validity of creditor claims. The Automatic Stay levels the playing field and eliminates the typical race to the courthouse whereby creditors would eviscerate the debtor asset by asset

11. What is the bankruptcy difference between Chapter 7 and Chapter 11?

The main difference between Chapter 7 and Chapter 11 bankruptcy is that under a Chapter 7 bankruptcy filing, the debtor’s assets are sold off to pay the lenders (creditors) whereas in Chapter 11, the debtor negotiates with creditors to alter the terms of the loan without having to liquidate (sell off) assets.

12. Describe how a bill becomes a law.

The process of a bill becoming a law is generally a ten step process. Steps for a Bill to Become a Law:
1. Introduced into a house of congress
2. Number and title given to the bill
3. Sent by presiding officer to appropriate standing committee
4. Public hearings are held
5. Debated and voted on by committee members; most bills are shot down at this step
6. Entire house then recieves the bill, if passed in step 5
7. placed on house Calendar
8. Full house debates and votes on bill
9. Other house recieves bill and the process is repeated
10. President signs or vetoes the bill

13. Provide examples of bilateral contract and unilateral contract.

For example, if someone offered to drive you to work on Mondays and Tuesdays in exchange for your promise to return the favor on Wednesdays and Thursdays, a bilateral contract would be formed binding both of you once you provided consideration by accepting those terms. But if that same person offered to pay you $10 each day you drove him to work, a unilateral contract would be formed, binding only upon the promisor until you provided consideration by driving him to work on a particular day. Another example for bilateral contract: Hansel and Gretel, wanting to give a lavish party for Arbor Day, contracted with a local hotel to rent a banquet room. The contract obligated the hotel to provide access to the banquet room during certain hours on a given date in exchange for payment of a fee to be paid by a set date. Their agreement is bilateral.

Example of a unilateral contract: “I will pay you $1,000 if you bring my car from Cleveland to San Francisco.” Bringing the car is acceptance. The difference is normally only of academic interest.

14. On application of contract, what is difference between UCC and Common law?

In the Common Law, if any change is made it would lead to rejection or counter offer of the offer. In UCC, minor changes do not have any impact and the original offer does not get cancelled. In Common Law, the terms include quantity, price, performance time, nature of work and identity of offer. On the other hand, the quantity is the main focus of the term in UCC. When the Common Law does not allow revoking of the option contracts, the offers made by a firm is irrevocable if the deal is made in writing in UCC. When the Statute of Limitation is four to six years in Common Law, it is four years in UCC.

15. In what situation, summary judgment is sentenced?

16. Briefly describe the following dispute resolution method.

Negotiation: Negotiation is the process of bargaining between two (or more) interests. It can be conducted directly by the concerned parties or can take place during the mediation process. In negotiation, the concerned parties meet to resolve a dispute

Mediation: Mediation is a procedure of dispute resolution broadly adopted in a number of contexts, from international crises, to legal confrontations, and business transactions.

Arbitration: Arbitration is a procedure in which a dispute is submitted, by agreement of the parties, to one or more arbitrators who make a binding decision on the dispute. In choosing arbitration, the parties opt for a private dispute resolution procedure instead of going to court.

17. Briefly explain Federal Court System.
The United States federal courts make up the judiciary branch of federal government of the United States organized under the United States Constitution and laws of the federal government. The United States district courts are the general federal trial courts, although in many cases Congress has passed statutes which divert original jurisdiction to the above-mentioned specialized courts or to administrative law judges (ALJs). In such cases, the district courts have jurisdiction to hear appeals from such lower bodies. The United States courts of appeals are the federal intermediate appellate courts. They operate under a system of mandatory review which means they must hear all appeals of right from the lower courts

18. What is Independent agency?

A regulatory agency part of the government of the United States established by Congress but works independently of the executive governmental departments in a supervisory role. Independent agencies can be qualified as either a public authority or a government agency.

19. When there is wrong-doing activity, how is it classified according to Tort law, Criminal law or Contract law? Contract law is based on an enforceable written or verbal agreement. The elements of a breach oc contract claim are offer, acceptance and consideration. “Consideration” is value given or promised to support the undertakings of each party to the contract. It can consist of various things, such as money, services, or the mutual exchange of promises. Some contracts must be in writing in order to be enforceable. Contracts made for an illegal purpose, for example gambling or prostitution, are not enforceable at all (assuming the place where the contract is made does not permit the activity)

Tort law is the law of “personal wrongs” and is different from contracts. An example of a tort is negligence. Negligence is the failure of a person to use that degree of care that a hypothetical “reasonable person” would use under similar circumstances. If someone is harmed or sustains damages as a result, the wrongdoer may be held liable. In general, the extent of damages recoverable are those which are reasonably foreseeable from the standpoint of the wrongdoer. As a practical matter, that measure of damages is fluid in that “reasonably foreseeable” is determined by the finder of fact (judge or jury).

20. What is Finance Lease?
A finance lease or capital lease is a type of lease. It is a commercial arrangement where: * the lessee (customer or borrower) will select an asset (equipment, vehicle, software); * the lessor (finance company) will purchase that asset;

* the lessee will have use of that asset during the lease; * the lessee will pay a series of rentals or installments for the use of that asset; * the lessor will recover a large part or all of the cost of the asset plus earn interest from the rentals paid by the lessee; * the lessee has the option to acquire ownership of the asset (e.g. paying the last rental, or bargain option purchase price);