Michael, the president of a health club operation called Head-to-Toe Health Club, convinced the board of directors to approve a large purchase of a certain fitness machine called “Perfect Body.” Michael had carefully investigated the machine and did a presentation to the board on its purported benefits. Unfortunately, after the purchase, it was announced that “Perfect Body” was actually a very dangerous machine that should not be used. The manufacturer of “Perfect Body” went bankrupt, and Head-to-Toe lost $200,000 on the purchase of the machines. The shareholders are furious and want to sue Michael and the directors. In an attempt to appease the ring leader of the shareholders, Simone, the board of directors agrees to allow her to purchase stock of the company at below its fair market value. Simone purchases a considerable amount of stock on that basis, but says that the shareholders plan to continue with an action against Michael and the board members. Under which of the following should Michael and the board of directors defend themselves in an action brought by shareholders for harming the corporation?

The cell type found in nervous tissue is the _________.

Groups of cells that are similar in structure and function are called:

Congratulations!  You are now finished with unit 1!   

“Head of household” status is available to a taxpayer:

Ryan was a partner in ZYX law firm. He decided to withdraw from the partnership because he wanted to retire early in Costa Rica. The partnership agreement of ZYX law firm did not specify the objective or duration of the partnership. Although Ryan gave proper notice, the other partners claimed that he had no right to withdraw. Ryan was angry and decided to get even. Two days after he withdrew and before the partnership had provided notification to any suppliers of his departure, Ryan went to the office supply store at which he typically purchased supplies on account for the firm. He purchased several cameras, a computer, and other items, which he placed on the firm’s account. Ryan just smiled when Joe, the manager at the store, told Ryan that he really appreciated the law firm’s business. The next day Ryan headed for Costa Rica and cannot be located. Joe later requests that ZYX firm pay the bill for Ryan’s purchases. The law firm, whose members had decided to continue the partnership after the dissolution resulting from Ryan’s resignation, refused on the basis that Ryan had no authority to make the purchases. Joe says that he did not know that and that he expects to be paid immediately. Which statement is true regarding whether Ryan had actual authority to bind the partnership in regard to his purchases at the office supply store?

Rufus, Sven, and Igor are partners in a Health Club. They executed a partnership agreement ten years ago. Rufus and Sven want to grow the company and approach Igor with their ideas. First, they want to add two partners into the partnership who have extensive capital. Second, they want to move the club into a new direction, by adding a restaurant and a casino. Third, they want to purchase new exercise equipment from SportsCo. Igor doesn’t want to add new partners and despises the idea of adding the restaurant and casino. Igor agrees that new equipment is needed, but insists they continue to purchase equipment from HealthCo. Rufus and Sven tell Igor, that he’s outvoted and also tell him they want to revise the partnership agreement’s provision regarding mandatory retirement. Can the two potential new partners be added to the partnership without Igor’s vote in favor of doing so?

Cheeseland, Inc., manufactures processed cheese products. BigCheese, Inc., seeks to purchase Cheeseland’s well-known trademarks and logos, and its factory and equipment. The Board of Directors of both companies vote in favor of the deal. Alba is a 15% shareholder of Cheeseland. Her grandfather started the business many years ago and she does not want the company to sell off its endearing trademark and the factory her grandfather built. She visits Myron, an attorney, and Myron tells her that the Board’s vote is legitimate to finalize the deal with BigCheese and the best she can do is take the money. Cyril is a shareholder in BigCheese, and his grandfather was cheated fifty years ago by Alba’s grandfather and he doesn’t want BigCheese to be responsible for Cheeseland’s enormous liabilities. Cyril threatens to take BigCheese to court because he claims shareholder approval is required to purchase Cheeseland. What type of transaction is the deal contemplated by BigCheese and Cheeseland?

Gordon and Leo are partners in SafeT Car, a full service automotive repair company. Leo does nearly all of the day-to-day work as Gordon is thinking about retiring. When Leo was moving a customer’s car last week, he accidentally collided with the garage door, and the door had to be replaced at a cost of $6,000. Leo recently met with BigBox stores about a potential deal by which BigBox would set up a SafeT Car shop in every BigBox store nationwide. Leo signed an agreement to open a “test” store in one BigBox store. Leo hasn’t told Gordon yet, because Gordon hasn’t been in the office in a month. Gordon opens The Oil Place, an express oil change company, which he plans to have his sons operate in his retirement. When Leo learns about The Oil Place, he threatens to sue Gordon for breach of duty because Leo is sick of doing all the work at SafeT Car while Gordon was apparently opening a competing business. Gordon tells Leo that he hasn’t breached any duty and they don’t have a written agreement that restricts Gordon from opening his own store with his sons. Gordon also tells Leo that the $6,000 for the damaged door is coming out of Leo’s pocket. Leo, who’s thinking about the potential deal about BigBox, tells Gordon he wants to split up the partnership. Did Gordon breach any duty by opening his own oil change store?

Rufus, Sven, and Igor are partners in a Health Club. They executed a partnership agreement ten years ago. Rufus and Sven want to grow the company and approach Igor with their ideas. First, they want to add two partners into the partnership who have extensive capital. Second, they want to move the club into a new direction, by adding a restaurant and a casino. Third, they want to purchase new exercise equipment from SportsCo. Igor doesn’t want to add new partners and despises the idea of adding the restaurant and casino. Igor agrees that new equipment is needed, but insists they continue to purchase equipment from HealthCo. Rufus and Sven tell Igor, that he’s outvoted and also tell him they want to revise the partnership agreement’s provision regarding mandatory retirement. Can Rufus and Sven change the partnership agreement if Igor votes against doing so?