Officers and LLC management Bar Exam Flashcards - Medical Study Cards
Master Officers and LLC management with Oncourse flashcards. These spaced repetition flashcards are designed for medical students preparing for NEET PG, USMLE Step 1, USMLE Step 2, MBBS exams, and other medical licensing examinations.
Officers and LLC management Flashcard Deck - 8 Cards
Flashcard 1: What authority does a member or manager have to bind an LLC?
Answer: A member of a member-managed LLC, or a manager of a manager-managed LLC, generally has authority to conduct ordinary-course business. Authority may be limited by the operating agreement, but the LLC can still be bound when a third party reasonably relies on apparent authority.
Flashcard 2: When is a corporate officer personally liable for a contract signed on behalf of the corporation?
Answer: An officer is generally not personally liable merely for signing for a disclosed corporation in a representative capacity. Personal liability may arise if the officer personally guaranteed performance, signed as an individual, acted for an undisclosed principal, breached an independent duty, or breached an implied warranty of authority (unless the outsider knew the officer lacked authority).
Flashcard 3: What authority do corporate officers have?
Answer: Officers have the actual authority granted by the board, bylaws, or governing law and the apparent authority reasonably associated with their position. The corporation may be bound to a third party who reasonably relies on an officer’s apparent authority, even if the officer exceeded actual authority.
Flashcard 4: Under ULLCA, what is the default management structure for an LLC, and how does it differ from a manager-managed LLC regarding ordinary business decisions?
Answer: The default under ULLCA is a member-managed LLC, where members ordinarily have equal management rights and decide ordinary-course matters by a majority. In a manager-managed LLC, managers handle ordinary management, and a majority of managers decides ordinary-course matters, while members retain voting rights on specified major matters like appointing/removing managers or acts outside the ordinary course.
Flashcard 5: Who may remove a corporate director, and what is the majority rule?
Answer: Shareholders generally may remove directors with or without cause unless the statute or governing documents limit removal, such as by requiring cause or prohibiting removal of directors elected by cumulative voting. The board generally cannot remove a director merely because it disagrees with the director’s vote.
Flashcard 6: How are ordinary and extraordinary LLC decisions generally approved?
Answer: Under the majority default rule for a member-managed LLC, ordinary-course decisions are approved by a majority of the members based on their interests, while extraordinary matters generally require unanimous member consent. The operating agreement and applicable LLC statute may change these requirements.
Flashcard 7: What is a quorum of a corporate board?
Answer: A quorum is the required minimum number of directors present to conduct business, usually a majority of the authorized number of directors. A board action taken without a quorum is generally invalid unless properly ratified.
Flashcard 8: What vote is generally required for directors to approve corporate action?
Answer: Under the majority rule, action requires a quorum to be present and approval by a majority of the directors present, unless the governing law or documents require more. Abstentions generally count as neither votes for nor against.
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