LAW 3102 Study Guide - Final Guide: Respondeat Superior, Eran, Fiduciary
Mock Exam
1a. The rule regarding when a vote by shareholders is needed is when there is a
fundamental change (merger, consolidation, or when all or substantially of the assets are
purchased). No a formal vote by the shareholders of Joker’s Headbands is not required
since this is not a fundamental change.
1b. This is a fundamental change because this is a direct merger therefore a vote by
shareholders and board of directors by both corporations is necessary.
1c. Since a parent corporation owns at least 90% of a subsidiary corporation then this would
be considered a short form merger. Then the parent corp only needs a majority vote by the
board of directors of the parent corporation.
1d. Batman has appraisal rights. That means as a dissenting shareholder he has the right to
get paid fair value of his shares premerger.
1e. Yes my answer would be different because then it would no longer be a short form
merger. Because for a short term merger, a parent corporation needs to own at least 90%
of the merger and in this case they would own only 89%. Therefore, they would need the
approval of shareholders and board of directors from both corporations.
2a. If Ron, Tom and Udi form a general pship as three equal partners each partner will have
equal voting rights. However, all partners will also have unlimited liability and be jointly and
severally liable.
2b. If Tom and Udi are general partners they will have unlimited liability and be jointly and
severally liable. Ron will be liable only up to his investment, however he could jeopardize his
limited liability status if he gets voting rights associated with control. Otherwise, Ron;s voting
rights will be contingent upon the partnership agreement which may or may not grant him
the voting rights he desires
2c. If they forma member-managed limited liability, the voting rights will be contingent
upon the LLC statue, however most states allow equal voting rights to all partners. Since this
is a limited liability company each member will only be liable up to their investment.
3a. The general rule regarding respondeat superior is that the principal will be liable for any
tort committed by the agent that falls within scope of employment. Since this tort was
committed by Eran within the scope of employment therefore the Principal D&M Toasts will
be held liable. Judgement for Franny
3b. The general rule is that everyone is liable for their own torts, therefore Eran is liable for
her own tort and for breach of duty of care if she was extremely careless and did not follow
Document Summary
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