1) Forms: -

You have decided to manufacture toy cars. What form do you want to use? Give at least one plus and minus for a sole proprietorship, partnership, and limited liability organization given your own circumstances (or a set of made-up circumstances if you prefer not to share). Consider who you would want to work with. Think about the time inputs, tax consequences, and liabilities that might be involved.

2) Rightsand Duty:

Pick a right and a duty of a partnership and explain each. Why are they important? Do you agree that partners should have this right and duty? Why or why not?

3) Your company is a real estate firm.One of your employees,Mrs.Jones,is a real estate agent.While at the company picnic,she mentioned to one of the board members that her husband has a general power of attorney for an elderly neighbor,Mr.Eagle,who recently moved into a nursing home.Her husband gave Mr.Eagle's house to her,and that they had sold it to a third party,using the company name to put on an open house.

The power of attorney was silent about the right to donate or gift Mr.Eagle's property.Mr.Eagle learned about the sale and accused Mr.Jones of breaching his fiduciary duty,and that he acted contrary to Mr.Eagle's best interests.Mr.Eagle also mentioned that he was thinking of suing the company,since its name was used at the open house.

Mrs.Jones says that the power of attorney did not specifically prohibit giving away the property and selling it,and that if Mr.Eagle had wanted such a prohibition he should have included it in the power of attorney.

The board member brought the issue to the board to assess the exposure to the company and its employee.The board has asked the GC to prepare a preliminary assessment of the following questions for the board to discuss this week to decide if they think the employee was in the right:

1. Was there a breach of fiduciary duty?
2. Does it matter that the power of attorney was general?
3. Would it make a difference if a high price was received for the house and the proceeds of the sale turned over to Mr.Eagle?
4. Does it matter what the relationship was between Mr.Jones and Mr.Eagle?
5. Does the company have any liability because of the acts of its agent?