We first examined the elements of a gift noting how intent and delivery are related. I explained how a gift by definition lacks consideration and therefore an enforceable gift causa mortis should be articulated in a will or trust. I next provided instruction on co-ownership by explaining the elements of a joint tenancy, a tenancy in common, and a tenancy by the entirety. I addressed these forms of ownership for real property and bank accounts and the implications of each form of ownership.
We began our next unit on real property by examining the difference between real and personal property and exploring what items are considered fixtures and why. I further noted how real property can be conveyed by sale, gift , or inheritance. Last, I addressed Kaitlin's interesting questions about real estate development regarding the role of the developer, the HOA
, and the country club in operating and developing a subdivision . I further mentioned bills before the Florida legislature to eliminate HOAs and ad valorem taxes.
In preparation for tomorrow's test we discussed and analyzed case hypotheticals involving liability of general partners, breach of fiduciary duty, and individual liability of corporate officers and directors for wrongs committed by other officers. We explored general partners as agents for each other, and how the corporate form can protect an officer or director who owns 100% of the shares of a corporation from liability where he has not participated in another officer's wrongdoing.
We first reviewed the management structures of corporations and LLCs. I discussed how a corporation and a non-member managed LLC have the flexibility to hire experts to operate the business even if the experts are not owners. I then provided instruction on the benefits of the LLC: avoid double taxation, and significant asset protection. In this regard, I discussed how creditors of the LLC are limited to securing charging orders to enforce a debt thereby not risking the loss of the ownership interest to creditors. We further discussed the ease of forming and flexibility inherent in the LLC form of ownership compared to a corporation. Last, we reviewed Kaitlin's homework . Her homework evidenced mastery of legal definitions and characteristics of each form of business ownership.
We studied corporate structure, the role and legal duties of directors and officers and how officers and directors can at times become legally responsible for the corporation's contractual debts if the creditor can "pierce the corporate veil." I described the legal requirements and fact patterns that could lead to piercing the corporate veil. Regarding director liability we studied the business judgment rule and the role of D & O insurance. Further, I provided instruction on the tax treatment of both C corporations and S corporations. Last, we viewed the Florida Dept of State's webpage and looked at some actual annual reports, Articles of Incorporation and other filed organizational documents for corporations and LLCs..
During the first segment, we reviewed Kaitin's test on employment law. Although she did very well, we took the time to review the elements of a punitive damage claim in a sexual harassment suit. We then reviewed the definitions for different types of business organizations as well as some of their salient characteristics. Kaitlin did very well in the exercise and evidenced mastery of the reading assignment on the characteristics of both C and S corporations.
We first examined the advantages and disadvantages of a general and a limited partnership . I discussed the issue of unlimited liability for a general partnership and addressed how in a limited partnership , an investor can act as limited partner and limit his exposure to the amount of his investment. We further discussed tax implications of both forms. I then began instruction on corporations. I explained how a corporation is a legal fiction separate from its shareholders. We discussed how shareholders are generally not personally liable for a corporation's contractual obligations but still remain liable for their own torts. I further addressed how a corporation can exist in perpetuity as opposed to a partnership.
We began our next chapter on business organizations . I outlined the most common forms of ownership: sole proprietorship, partnership, corporation(S and C types) and LLCs. I further discussed the factors that influence the type of ownership: tax implications and protection of individual assets. Last , I noted the types of legal documents used in each type of ownership.
