23. TRANSACTING BUSINESS, USING THE FACTS BELOW, DISCUSS WHEN, IF AT ALL, TECH CONSULTING INC, a North Carolina domestic corporation, will be deemed to have been transacting business in MI. DISCUSS. 24. -January 2023: Tech Consulting Inc, a North Carolina corporation, decides to open a one person sales office in Michigan. 25. -April 2023: It holds a directors' meeting in MI to investigate sites in April 26. -June 2023: Tech Consulting Inc opens a bank account in June, 27. -July 2023: Tech Consulting Inc begins marketing and advertising in MI off(and offers can be accepted in MI), 28. -Sept 2023: Tech Consulting Inc buys real estate and opens its office in September, but has no business until November. 29. All shareholders of Common A stock in Metro Builders, Inc. received dividends except Mike. What kind of action should Mike bring? Why? 30. Lakewood Inc. and Westwind Corp. wish to combine as approved by the respective Boards of Directors. The resulting corporation will be Lakewood Inc. Each corporation has 1000 shareholders. At the time of the transaction, Westwind Corp. owes $350,000 to its banker. 31. What is this legal combination called? 32. Which group of shareholders, if any, must approve the transaction? 33. What is the legal effect on Westwind Corp? 34. What happens to Westwind's debt of $350,000 owed to its bank? 35. What happens if a shareholder of Westwind is opposed to the combination/ transaction? Does the shareholder have any alternatives or remedies? 36. When, if ever, is it unnecessary to obtain shareholder approval for this combination. Discuss fully.37. By which corporation, if any or both, is shareholder approval required if, instead of combining with Lakewood Inc., Westwind Inc. simply purchases Lakewood Inc. 's assets? Discuss. 39. Gray & Hall, Inc., a Michigan corporation, has $60,000 in its corporate bank accounts. 40. Gray & Hall, Inc. owes its landlord $65,000. Additionally, the corporation has had difficulty paying its monthly bills and obligations. May the corporation use the $60,000 in its accounts to distribute a cash dividend to its shareholders? Why or why not? Discuss, including the name of the concept governing your answer. 41. Gray & Hall Inc. is comprised of 4 shareholders who are also the directors and officers of the corporation. Shareholders occasionally "borrow" money from the corporation to meet their living expenses (and they always pay the money back). Craig Creditor sues the shareholders/directors individually when the corporation fails to pay its debt. Discuss fully the theory of liability the Creditor is asserting and analyze what he must prove to prevail. 42. Dissolution 43. Give two reasons why a state may dissolve a corporation. 44. Celia, a shareholder, is extremely frustrated with her corporation because its six directors are so opposed to each other they are deadlocked. No business is being conducted. What can Celia do? Discuss. 45. How should a corporation ensure that all claimants and creditors submit their claims to the corporation before it is dissolved? 46. What and when do shareholders receive upon a corporation's dissolution? Discuss.Short Answer - Practical Application GLOBAL FACTS: Sam cannot decide whether to operate her management business as a Sole Proprietorship or a LLC. 16. If Sam intends to be the only individual involved in ownership/management, discuss fully whether or not both entity formations - i.e., Sole Proprietorship + LLC - are an available option under the global facts presented. 17. Discuss the taxation and liability implications for Sam for each entity form (Sole Proprietorship + LLC), and discuss if one entity is a clear winner over the others. A. Anna Brown is an attorney and partner in a limited liability partnership (LLP). She is located in the Michigan office. Answer the subparts below which include additional facts: 1. Assume Anna is the supervisor of the attorney who committed malpractice. Describe fully Anna's liability, if any, and justify it. 2. Assume a partner in the Michigan office borrowed $100,000 from a bank without notifying other partners. Describe Anna's liability, if any, for this obligation and justify it. 3. Would liability differ if this was a general partnership and Anna was a general partner? Discuss. 4. Assume Jo Brown is a limited partner in a limited partnership (LP) called "Bond, Carter and Brown, L.P." Discuss the ramifications to Jo of the business name if no one else in the LP has the surname "Brown." B.Sam is a limited partner in a limited partnership engaged in real estate construction. Discuss fully the impact on his limited partnership status and potential liability if he does any of the following acts: 1. Asks for a monthly meeting. 2. Bids on behalf of the LP to begin construction of a new shopping mall in town while telling bidders she is a "major partner" in the "partnership"True-False Section 1. All jurisdictions permit one-member LLCs T F 2. A general partnership can be formed by a handshake agreement. T F . A corporation may be a partner in a general partnership T F Once a corporation is duly organized no further filings with the secretary of state on an ongoing basis are required. T F 5. Amendments to a corporation's bylaws must be filed with the Secretary of State. T F ABC, Inc. has 100 shareholders. It can elect S status. T F Pre-emptive rights generally exist whether or not the articles of Incorporation provide for them. T F 8. In the event of a corporate liquidation, bondholders will receive assets before shareholders. T F 9. Shareholders play an ongoing part in day-to-day operations of a publicly traded corporation. T F 10. A corporation must have a registered agent in the state of formation T F3. Sam and Pat want to co-own a law firm, particularly a PLC (professional limited liability company) in Michigan. Sam is a licensed attorney. Al is a paralegal and, thus, does not have a license to practice law, may Sam and Pat both own shares in the LLC? Why or Why not? and analyze each person separately. 4. Sam is withdrawing from a business; the written agreement is silent on the issue of withdrawal. Discuss the effect of Sam's withdrawal on the continued existence of the business in each of the following circumstances: 5. the business is a general partnership in Michigan and Sam is a general partner 6. the business is a manager-managed LLC and Sam is one of five managers: 7. the business is a corporation and Sam is a shareholder/officer. 8. The operating agreement for a business is silent on the allocation of profits and losses to its three members. Sue contributed 60% of the capital; Mark contributed 20% and Jules contributed the other 20%. Discuss fully how will profits of $100,000 be distributed in each of the following circumstances: 9. The business is a limited liability partnership (LLP) 10. The business is a limited liability company (LLC) 11. The business is a limited liability partnership (LP) 12. Assume that ABC Inc. failed to send notice of its annual shareholders' meeting to Claire, a shareholder with 15 shares. What may Claire do? What can the corporation do, if anything to "save" the meeting? 13. LMN, Inc. has amended its articles several times, making them confusing to read. What should LMN do to "clean up" its articles?14. Jackie Taylor is sued when one of her employees accidentally spills scalding coffee on a patron causing serious burns and requiring plastic surgery. 15. Assume Jackie operates a sole proprietorship. Is she liable for this act? Why or why not? 16. Assume the business has $10,000 in its accounts and the patron obtains a $50,000 judgment against the business: What assets will be available to the patron to ensure compensation for the injuries if the business is a sole proprietorship? 17. How could Jackie protect herself from risk inside a sole proprietorship? 18. Assume the business is a small corporation, what assets of Jackie's, if any, will be available to the patron to ensure compensation for injuries? 19. Assume the business is a limited partnership and Jackie is a limited partner, what assets of Jackie's, if any, will be available to the patron to ensure compensation for injuries? 20. Assume the business is a general partnership; that Jackie has a total of 3 partners (Jackie being one of them); and that the operating agreement is silent on the issue of liability. Discuss fully and identify the name and principle that governs your answer here. 21. Two years ago, Harris & Walter, Inc. purchased a parcel of land in Seldridge, Michigan for $1,000,000. At the time of the purchase, the corporation used a licensed real estate broker and gave serious consideration to the purchase. Due to unexpected decline in the real estate market, the parcel is now worth only $600,000. Define and discuss any defense to liability the directors may assert if sued for the loss in value/decision to purchase in the first instance. 22. The bylaws of A-1 Inc. provide that shareholders must be of record 30 days prior to a meeting in order to receive notice of and to vote at the meeting. The annual meeting will be held on July 1. On June 1, Taylor Evert owns 150 shares of stock of the corporation. On June 5, he sells these to Diana O'Hara. Who, if not both, is entitled to notice of and to vote at the meeting? Why?Short Answer-Definitions 1. Identify the documents, if any, which must be filed to form the following business entities 2. sole proprietorship 3. limited partnership 4. limited liability partnership 5. corporation 6. Ace Corp, Inc has issued all of the authorized shares and wants to issue more. What if anything must Ace Corp, Inc do to issue additional shares? 7. Corporate combinations: answer the following: 8. Corporation A combines with Corporation B to form Corporation X. This type of combination is called 9. Describe what it means to say that corporations are subject to "double taxation", and then discuss how a "small corporation" (which is not a S corporation) in which all shareholders are actively employed by the corporation might minimize double taxation. 10. Fully distinguish between "equity" securities and "debt" securities. 11. Distinguish between "articles of incorporation" and a corporation's "bylaws". 12. A corporation formed in one state but doing business in another state is called a corporation in the state in which it was not incorporated but is doing business. 13. Give one advantage of using a broad purpose clause in the incorporating documents. 14. What is the difference between "dissolution" and "liquidation", and in answering this question, be sure to additionally include the type(s) of document fillngs and/or notices associated with each term. After a corporation terminates its existence, what, if anything, must be filed with the secretary of state? 15. Why do directors and officers often insist that their corporations provide them with D&O insurance? Will D&O insurance protect against ALL claims? Discuss fully